July 10, 2014

NAFCU members engage at NCUA listening session

July 11, 2014 – NAFCU Regulatory Affairs Counsel PJ Hoffman and member credit union representatives attended an NCUA listening session with agency board members and staff about supervision and regulation, including the agency's risk-based capital proposal, in Chicago on Thursday.

During the session, NCUA Board Chairman Debbie Matz reiterated that any final rule would have a longer implementation period than the proposed 18 months.

The mood at the listening session was more contentious than the previous session, and at least four credit unions brought up the possibility of a second comment period for the proposal. Matz said the agency would offer one if the Administrative Procedure Act required it due to a change in the proposed rule's intent – however, she said that was unlikely. Matz also said NCUA is reviewing the proposed risk weights. NCUA does not intend for examiners to make decisions about the proposed rule's individual minimum capital requirement, she added.

Matz also fielded questions on interest-rate risk. She said only the largest credit unions with the highest risk will be the agency's focus.

As NCUA considers next steps for this proposed rule, NAFCU will continue to press for significant changes, among them:

  • risk-weighting that does not place credit unions at a competitive disadvantage with community banks;
  • clear guidance on capital expectations instead of a potentially arbitrary "individual minimum capital requirement"; and
  • an implementation and compliance period of at least three years.

Given the recent comments from NCUA Board members regarding the significant changes that will be made to the rule before it is finalized, NAFCU members continue to believe a public review of those changes is necessary before a new rule is finalized. NCUA has said there will be significant changes made to the rule before it is finalized.

On Monday, House Financial Services Subcommittee on Oversight and Investigations Chairman Patrick McHenry, R-N.C., asked Matz to provide his subcommittee with information to support the agency's risk-based capital proposal by July 18.

Thursday's listening session was the second of three slated. The first was held June 26 in Los Angeles; NAFCU has posted a recording of that session online. A recording of yesterday's session will be available soon.

The next session is set for July 17 in Alexandria, Va.