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NCUA Proposes Changes to Capital Planning and Stress Testing Reqs
Tuesday, October 24, 2017 6:45 AM

At its open board meeting last week, a rule was proposed to change the National Credit Union Administration capital planning and stress-testing requirements to be more tailored to the size, complexity, and financial condition of covered credit unions.

The proposed rule would authorize federally insured credit unions with assets of $10 billion or greater to conduct their own stress tests in accordance with the NCUA's requirements and allow those credit unions to incorporate the stress-test results into their capital plan submissions to the agency. It would provide covered credit unions some regulatory relief while saving the agency some money. 

The proposed rule would break covered credit unions into three tiers, with tailored requirements:

  • Tier 1: For credit unions with assets greater than $10 billion in their first three capital planning cycles, stress testing would not be required.
  • Tier 2: Credit unions with three or more capital planning cycles but less than $20 billion in assets would run stress tests under the NCUA's scenarios and guidance, but they would not be subject to the 5 percent minimum stress-test ratio.
  • Tier 3: Credit unions with $20 billion or more in total assets would run stress tests under the NCUA's scenarios and guidance and be subject to the 5 percent minimum stress-test ratio.

NCUA has also reserved the right to conduct stress tests on covered credit unions if it deems such action necessary. View the proposed rule online here. Comments must be received within 60 days of publication in the Federal Register.