NCUA Board takes up stress testing, associational common bond today
April 24, 2014 – The NCUA Board today is expected to approve a final rule on stress testing and capital planning and issue a proposed rule on associational common bond, both of which NAFCU views as causes for concern.
Today’s meeting, set for 10 a.m. Eastern, also includes a quarterly report on the National Credit Union Share Insurance Fund and a credit union’s request to expand its charter.
On Monday, NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt told the NCUA Board that the agency’s stress testing proposal, which would apply to credit unions with $10 billion or more in assets, is inappropriate, costly, unnecessary and should be reconsidered.
Although NAFCU acknowledges the benefits of stress testing as a practice, Hunt said, the proposal’s cost – which NCUA estimated at about $1 million per stress test the first year and $500,000 after that – outweighs the potential benefits. Hunt also emphasized that the rule currently would apply to only four credit unions, and all four already engage in independent stress testing and capital planning. She said NCUA should allow the covered credit unions to continue to conduct their own stress tests.
Hunt also expressed NAFCU’s concern over costs of this rule to the NCUSIF. These costs would reduce the funds available to protect all insured credit unions.
NAFCU will be listening today for details of the agency’s proposed rule on associational common bond requirements; the proposed rule follows common-bond issues raised last year in NCUA Letter 13-FCU-03. NAFCU is pursuing improved field-of-membership rules through its five-point plan for credit union regulatory relief.
NCUA Board agenda
NCUA letter 13-FCU-03
NAFCU's five-point plan
"Hunt: Stress test proposal too burdensome, unnecessary" 4/22/14