Go to:

July 2018
< Jun Aug >
Leaguer Email Subscription

You are not currently subscribed. Click Subscribe below to receive the Leaguer email.

NCUA to Propose Revised RBC Rule for New Comment Period
Tuesday, September 30, 2014 6:40 AM

National Credit Union Administration Board Chairman Debbie Matz announced yesterday her intent to request that a revised proposed risk-based capital rule be issued with a new comment period as a result of the significant structural changes being considered.

"I have always said that another comment period would only be appropriate if we decide to make significant structural changes that would exceed the parameters of the Administrative Procedure Act," Matz said. "Even though the changes we are developing would pose less of a regulatory burden than the original proposal, some changes would affect the rule's structure. Based on discussions with NCUA's general counsel, I now believe it is prudent under the APA to ask for additional comments."

The amended proposal will include a longer implementation period and revised risk weights for mortgages, investments, member business loans, credit union service organizations, and corporate credit unions. Stakeholders will also be invited to comment on an alternative approach for addressing interest rate risk using the supervisory process.

‚ÄčNCUA Board Vice Chairman Rick Metsger praised Chairman Matz for her willingness to consider structural changes in the proposed rule. Metsger said, "I believe interest rate risk is important and must be addressed in the risk-based capital rule, but it should be addressed separately from credit risk. I am pleased we appear to be moving in the direction of separating interest rate risk and credit risk and that structural change alone is sufficient for me to believe an additional comment period would be appropriate."

Metsger added that while an amended proposed rule has not been drafted, he believes that once it is, people will conclude that the NCUA has heard the comments that were submitted during the initial comment period. "Those who weighed in thoughtfully on the original proposal will see the agency has been responsive to fact-based analysis," Metsger said.

Richard Ensweiler, Cornerstone's CEO, said, "This action by NCUA indicates that the new version of the rule will likely include substantial changes, which should be a move in the right direction. We want to thank all of our credit unions for their participation in the comment process, and we encourage them to be on deck to comment in round two."

Cornerstone Credit Union League's Suzanne Yashewski, SVP Regulatory and Compliance said of the news, "At the summer NCUA listening session in Chicago, Cornerstone credit unions and others in attendance repeatedly stressed to Chairman Matz the importance of republishing the rule for further comments. We are pleased that NCUA has agreed to republish the rule."

Matz anticipates that the NCUA board could issue an amended proposal before the end of 2014.