October 15, 2015, the NCUA Board voted 2-1 to approve a final risk-based capital rule
which will take effect January 1, 2019. NAFCU has consistently opposed this
rulemaking and urged its withdrawal. We have long warned about the impact this
rulemaking will have on the credit union industry – in particular the
regulatory burden and costs it will impose. Given NCUA’s insistence on moving
forward with this rule, NAFCU worked steadfastly during 2014 and 2015 to make a
bad rule better. As a result of our efforts, the final rule recalibrates
many risk weights to better align with banks’ requirements, removes
interest-rate risk from the calculation of the risk-based capital ratio, and
extends the implementation date.
To create a true and fair risk-based capital system
for credit unions, NAFCU fundamentally believes that legislative reforms are
necessary. NAFCU has outlined a legislative solution that will institute
fundamental changes to the credit union regulatory capital requirements in our
Five-Point Plan for Regulatory Relief. The plan, as it relates to capital reform:
NAFCU continues to provide its members with in-depth analysis and tools to help assess how the new proposal will impact their credit unions, including:
The final rule makes the following key changes to the
agency’s current capital requirements:
NAFCU issued a Final Regulation comprehensively analyzing RBC's requirements as well as summarizing the key compliance expectations for credit unions. Additionally, NAFCU published a series of blog posts highlighting and synthesizing the final RBC rule.
Since the NCUA Board initially proposed RBC in January 2014,
NAFCU and our member credit unions have continually advocated for significant
changes. The final rule includes the following key changes:
To learn more about the issues NAFCU fought for and against in the RBC rule, please read the official comments submitted to NCUA on the agency's first and second proposal.
On September 12, 2017, Representatives Bill Posey (R-FL) and Denny Heck (D-WA) reintroduced H.R. 3736, a bill that would require NCUA to "stop and study" the NCUA's RBC rule. The bill would require NCUA to submit its study on the rule to
Congress, along with legislative recommendations to improve the credit
union capital system. If the bill is passed, the agency would not be able to implement the RBC rule until 120 days after the report goes to Congress. The House Financial Services Committee approved a previous version of the bill in the 114th Congress.
On November 23, 2015, NCUA sent a report
on its recently adopted risk-based capital rule to the House Financial
Services Committee in the
228-page report, NCUA defends the agency’s legal authority to create a
two-tier risk-based capital system, also questioned in H.R. 2769. In
addition, the report recommends that Congress allow well-managed credit
unions to count supplemental capital as net worth and suggests other
technical legislative changes affecting credit union capital
Ultimately, NAFCU believes legislative changes are necessary to bring about comprehensive capital reform for credit unions such as allowing credit unions to have access to supplemental capital sources, and making the statutory changes necessary to design a true risk-based capital system for credit unions.
NAFCU has stayed at the forefront of this issue and continued to champion credit unions in major media nationwide.
Credit Unions Seek Clarification on Exec Comp Plan (Credit Union Journal, August 9)
Trade Groups Respond to New Exec Compensation, Incentive Proposal (CUToday.info, April 21)
NCUA Downplays RBC2 Effect on Credit Unions (Credit Union Times, October 24, 2015)
With RBC2 Final, NAFCU Focuses on Legislative Solution (Credit Union Times, October 19, 2015)
NCUA's Risk-Based Capital Rule Could Set Stage for Supplemental Capital Push (American Banker, October 16, 2015)
Washington Wrap: 'Wall Street regulates Congress' (SNL Financial, October 16, 2015)
NCUA Board, In 2-1 Vote, Approves RBC (CUtoday.info, October 16, 2015)
RBC Vote Could Prompt Tough Reaction by Congress (Credit Union Journal, October 15, 2015)
NAFCU Vows to Work to Make 'Bad Rule Better' (CUtoday.info, October 15, 2015)
NCUA: RBC2 Only Affects 16 Credit Unions (Credit Union Times, October 15, 2015)
See all of NAFCU's media outreach.
REGULATORY ALERT: 15-EA-02: NCUA - RBC2 (member-only) – Download NAFCU's summary of the new proposed risk-based capital rule.
View entire series of Risk-Based Capital posts
Letters to NCUA
Updated November 2017