December 12, 2019

NCUA's RBC rule delayed to 2022

The NCUA Board voted today to delay its risk-based capital rule, pushing its implementation date back two years to Jan. 1, 2022. 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. 

"Today, the credit union industry remains well-capitalized, manages risk well, and has proved resilient in light of the bank-led financial crisis of 2008," said NAFCU President and CEO Dan Berger. "We appreciate NCUA Chairman Rodney Hood's and Board Member J. Mark McWatters' commitment to ensuring credit unions benefit from an appropriate, modern capital regime by providing further review of the agency's risk-based capital rule.

"While the NCUA reviews its rulemaking, NAFCU strongly urges the agency to consider its rulemaking anew and assess risk based upon a credit union's specific business practices as opposed to an arbitrary asset threshold," Berger added.

The NCUA previously approved delaying the RBC rule until Jan. 1, 2020, but NAFCU recommended the agency pursue a longer delay and significant revisions to the rule. A NAFCU-backed provision to delay the rule by two years from its original implementation date passed the House three times in 2018.

During this delay period to 2022, the NCUA's current prompt corrective action (PCA) requirements would remain in effect. The NCUA has indicated it will also consider NAFCU's recommendation to provide credit unions with parity to changes made to bank capital under the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155). NAFCU has urged the NCUA to consider the impact of the current expected credit loss (CECL) standard as it reviews the RBC standard as well.

NAFCU will continue to encourage the agency to design a true risk-based capital system for credit unions.