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ECU Monitor: CUs concerned about RBC, CECL
The May edition of NAFCU's Economic & CU Monitor report – now available for download – found that nearly three-quarters of NAFCU members surveyed are concerned about the impact of the NCUA's risk-based capital (RBC) rule and the current expected credit loss (CECL) accounting standard on compliance costs and capital.
The newest edition of the Monitor is focused on capital planning as the NCUA Board begins to work on a new set of priorities under Chairman Rodney Hood. The NCUA last year finalized a one-year delay of the RBC rule – making the effective date Jan. 1, 2020 – and other changes; a majority of Monitor respondents said they support a longer delay.
NAFCU President and CEO Dan Berger has included RBC as a priority for Hood and new board member Todd Harper as they begin their tenures. The association also continues to call on Congress to delay the RBC rule so NCUA can consider additional reforms.
The Monitor's Credit Union Sentiment Index (CUSI) rebounded in May following its decline in recent months. Three of the four components improved from April, including the lending score which had the sharpest gain. Although the majority of respondents reported a positive outlook for growth prospects, those who were pessimistic cited regulation as the main concern.
The CUSI is an index based on NAFCU member responses to questions on growth and earnings outlook, lending conditions and regulatory burden.
NAFCU relies on survey responses to provide its members a glimpse of trends affecting the credit union industry as a whole. The association also uses survey responses to inform its advocacy efforts on Capitol Hill and with regulatory agencies such as the NCUA, CFPB and Federal Reserve. The next survey is focused on CFPB priorities; responses are due June 6.