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CUNA Looking into Cost of Bill to Study RBC Rule
Wednesday, June 17, 2015 6:40 AM

Credit Union National Association is reviewing a bill that was introduced Monday that would require the National Credit Union Administration to execute a study to determine appropriate risk-based capital (RBC) requirements for credit unions. The study would have to be completed before the agency could implement a final rule.

The Credit Union Risk-Based Capital Study Act of 2015 was introduced by Reps. Stephen Fincher (R-TN), Bill Posey (R-FL), and Denny Heck (D-WA).

Ryan Donovan, chief advocacy officer for CUNA, said, "The key question in any discussion about an RBC rule is 'how do you best affect the final outcome?' To that end, we are taking a look at this new bill to determine how much it would cost the NCUA—and by extension, how much it would cost credit unions—to conduct the study proposed by the bill. You have to weigh that cost against the likelihood that it would bring about any meaningful change to the final outcome. It may not make a lot of sense to do the study if it ends up costing the agency a significant sum but ultimately results in an unchanged rule."

Donovan suggested it might be more appropriate to consider getting Congress involved after the final rule is out, to see if it’s necessary. "As we have seen with the bank capital rules, Congress seems more likely to intervene after a proposal has been finalized because they have something to aim at and more tools at their disposal," he said.

Also, Donovan added it is important to consider how the timing of this bill might affect the other priorities that CUNA and credit unions are very actively working for on Capitol Hill right now.

He said, "If we are going to ask and expect further congressional action, we ought to take care to proceed deliberately to ensure the 'ask' is right, the timing is right and that it can meaningfully and positively affect the outcome."

CUNA will take the discussion of the bill to its Government Affairs Committee to get the views of its member credit unions.