Compliance Blog

Feb 06, 2015
Categories: Operations

RBC2: A Penny for Your Thoughts

 Written by Alicia Nealon, Director of Regulatory Affairs

In case you didn’t see, RBC2 was published in Federal Register last week, and the comment deadline has been set for April 27th.  With that in mind, we are launching a series of posts where NAFCU’s Compliance Blog will break down different portions of the proposal and highlight the key issues that we are looking for your feedback on.  Today’s topic is the proposed definition of “complex credit union.”

RBC2 would, among other things, change the definition of “complex credit union,” for the purposes of NCUA’s capital requirements.  The Federal Credit Union Act directs NCUA to base its definition of ‘‘complex’’ credit unions ‘‘on the portfolios of assets and liabilities of credit unions.’’  Under the current rule, credit unions are ‘‘complex’’ and subject to the risk-based net worth requirement only if they have quarter-end total assets over $50 million and they have a risk based net worth requirement exceeding 6%.  RBC2, however, would define the term ‘‘complex’’ credit union using a single asset size threshold of $100 million as a proxy for a credit union’s complexity.  In other words, RBC2 would establish a bright-line $100 million asset threshold to determine whether a credit union is complex for the purposes of NCUA’s capital requirements.

What does everyone think? Does your credit union agree that a bright line asset threshold of $100 million is an appropriate method of defining “complex credit union?” Or does your credit union believe the definition of “complex” should actually consider a credit union’s portfolios of assets and liabilities? In others words, would your credit union rather a bright-line asset threshold, or a review of the products and activities that your engaged in?

As you consider these questions, be sure to take a look at NAFCU’s Regulatory Alert 15-EA-02, our Capital Reform Issue Page, or reach out to me directly (, 703-842-2266) with your thoughts.