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NAFCU Board, NCUA's Hood discuss key CU concerns
Members of the NAFCU Board of Directors yesterday met with NCUA Board Chairman Rodney Hood to discuss issues affecting credit unions, including cybersecurity, capital reform, and exam modernization. NAFCU President and CEO Dan Berger and senior members of NAFCU's staff accompanied the group.
The NAFCU Board of Directors consists of credit union volunteers and management from across the country who are dedicated to maintaining an association that is in touch with and responsive to the needs of the membership.
During the meeting, the group also discussed NAFCU's Fintech whitepaper, designed to chart a path towards regulatory coordination between traditional financial institutions and fintech companies.
Cybersecurity
Chairman Hood expanded on his priorities relating to cybersecurity and some of the agencies current initiatives during the meeting. In recognition of National Cybersecurity Awareness Month last month, the NCUA reminded credit union stakeholders to remain vigilant as financial losses due to cybercrime reached $2.7 billion in 2018.
NAFCU consistently works with stakeholders to advocate for national data and cybersecurity standards, which the association believes should hold retailers the same level of protections for consumer data as financial institutions. The association has also flagged the increase in credit unions' costs as they implement efforts to bolster cybersecurity at their institutions.
As a leader in calling for such standards, NAFCU has numerous resources available to ensure credit unions can effectively identify and address cybersecurity concerns, including online compliance resources and an on-demand webinar.
Capital reform
Earlier this year, the NCUA Board moved forward with a proposed rule to further delay the implementation date of its risk-based capital (RBC) rule to provide credit unions with more time to prepare for implementation and to evaluate other potential changes and capital-related initiatives. NAFCU has previously urged the NCUA to consider the strength of credit unions within the framework and has shared several recommendations for the board to consider.
The association 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. Following the enactment of S. 2155, which made changes to bank capital, Berger encouraged the NCUA to "consider its entire rulemaking anew." Furthermore, a NAFCU-backed provision to delay the rule by two years from its original implementation date passed the House three times in 2018.
NAFCU will continue to encourage the agency to design a true RBC system for credit unions and push for a longer delay of the NCUA's current rule.
The group also discussed the Financial Accounting Standards Board's (FASB) current expected credit loss (CECL) standard, which has been delayed by an additional year for not-for-profits, including credit unions. NAFCU has previously asked for resources on CECL from FASB and the NCUA to help credit unions implement the new standard.
Exam modernization
NAFCU continues to meet with the NCUA to discuss efforts to modernize and improve the agency's examinations, including its Modern Examination and Risk Identification Tool, as well as other exam-related issues and has recommended that the NCUA expand eligibility for an extended 18-month exam cycle for all well-run, low-risk credit unions. The association has also asked for an update on the agency's exam modernization efforts.
Additionally, the newest edition of The NAFCU Journal features an article on the exam process with insights from representatives at credit unions and the NCUA.
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