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NCUA seeks input on additional RBC rule delay, changes; Cyber advisor appointed
The NCUA Board yesterday proposed a rule to further delay the implementation date of its risk-based capital (RBC) rule to Jan. 1, 2022. Additionally, the agency has opened the proposal for a 30-day comment period. NAFCU has led efforts to ensure credit unions and their members benefit from a modern capital regime, working closely with policymakers on Capitol Hill and at the NCUA. During this delay period, the NCUA's current Prompt Corrective Action (PCA) requirements would remain in effect.
At the NCUA Board meeting in October, the agency delayed its RBC rule's implementation date by one year to Jan. 1, 2020 – but NAFCU continued to push for a longer delay so the NCUA could revise the rule and consider other regulatory changes that will impact credit union capital, including the implementation of the current expected credit loss (CECL) standard. The one year delay will remain in effect until the proposed rule is finalized.
"We appreciate NCUA Chairman Rodney Hood's and Board Member J. Mark McWatters' efforts to provide this additional delay in order to provide the agency more time to reform its risk-based capital rule," said NAFCU President and CEO Dan Berger. "As the rule currently stands, NAFCU remains concerned about the regulatory burdens and costs the rule will place on credit unions."
Berger has encouraged the NCUA to "consider its entire rulemaking anew" following the enactment of S. 2155, which made changes to bank capital. Furthermore, a NAFCU-backed provision to delay the rule by two years from its original implementation date passed the House three times in 2018.
The association will continue to encourage the agency to design a true risk-based capital system for credit unions.
Following the meeting, the NCUA appointed Johnny Davis, Jr., as special advisor to the chairman for cybersecurity. Davis will also continue to serve in his current role as the NCUA's division director for critical infrastructure along with this new responsibility. Chairman Hood has identified enhancing cybersecurity protocols for the credit union industry as a top priority.