April 17, 2014

Stress testing, associational common bond, NCUSIF on April 24 agenda

April 18, 2014 – A final rule on stress testing and capital planning is up for action during the April 24 NCUA Board meeting along with a proposed rule on associational common bond and a report on the share insurance fund.

As proposed, the final rule would require stress testing for credit unions with more than $10 billion in assets.

In a December comment letter to the agency, Carrie Hunt, NAFCU's senior vice president of government affairs and general counsel, recommended that NCUA conduct a cost-benefit analysis of the rule since only four credit unions would be subject to the proposed requirement. To NAFCU's knowledge, these credit unions already conduct their own tests.

Hunt also questioned the need to set requirements for credit unions based on rules for banks from agencies such as FDIC and the Office of the Comptroller of the Currency. Credit unions' unique structure and mission make regulatory parity unnecessary in this case, she noted. Finally, Hunt said that if NCUA adopts the rule, the agency should allow credit unions to conduct their own stress testing and not require use of a third party. NAFCU also proposed specific modifications to the metrics used in the stress testing and capital planning proposals.

Next week's board meeting agenda also includes a proposed rule on association common bond requirements; the proposed rule addresses common-bond issues raised last year in NCUA Letter 13-FCU-03.

NAFCU is pursuing improved field-of-membership rules through its five-point plan for credit union regulatory relief. That plan calls for improved field-of-membership expansion rules, including authority for voluntary mergers among multiple-common-bond credit unions, an eased community charter conversion process and eased process for including those designated as "underserved" within a federal credit union's FOM.

A quarterly report on the National Credit Union Share Insurance Fund and a credit union's request to expand its charter are also slated for this meeting.