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October 31, 2017

NAFCU seeks members' input on NCUA stress testing changes

NAFCU is requesting members' feedback on the NCUA's proposed changes to its capital planning process and supervisory stress testing. Under the proposal, covered credit unions would be allowed to conduct their own stress testing and incorporate those results into their capital plan submissions.

In its Regulatory Alert sent to members yesterday on the proposed rule, NAFCU also highlights that the proposed rule:

  • subjects covered credit unions to tiered regulatory requirements depending on their size, complexity and financial condition;
  • eliminates the requirement for a covered credit union to seek NCUA approval prior to conducting its own stress test, though the NCUA retains its right to conduct stress tests on covered credit unions at any time; and
  • adopts an incremental approach to capital planning review that would adjust requirements for a covered credit union based on asset size.

The NCUA Board issued the proposed rule during its Oct. 19 meeting. The current process requires the NCUA to conduct a stress test even if a credit union conducts one of its own. While NAFCU is supportive of the proposed changes, the association will recommend additional ways for the NCUA to provide credit unions relief on stress testing in its official comment letter.

Member credit unions can submit comments to NAFCU on the proposed rule through its Regulatory Alert until Dec. 15. Comments are due to the NCUA by Dec. 29.