House agrees to delay credit union capital rule set to take place next year

A rule requiring credit unions to adopt “risk-based capital” in 2019 would be delayed by two years under legislation agreed to by the House Wednesday.

The Foreign Investment Risk Review Modernization Act of 2018 (H.R. 5841, passed on a vote of 400-2), which contains the credit union rule change, would delay the regulation approved in 2015 by the National Credit Union Administration (NCUA) Board.

Currently scheduled for implementation Jan. 1 of next year, the “RBC” rule revises the agency’s “prompt corrective action” regulations, replacing the current risk-based net worth requirement with a new risk-based capital ratio for federally insured credit unions.

NCUA, in issuing the final rule three years ago, said the RBC requirement is more consistent with the agency’s risk-based capital measure for corporate credit unions and more comparable to regulatory risk-based capital measures used by the Federal Deposit Insurance Corp. (FDIC), Board of Governors of the Federal Reserve System (Fed), and Office of the Comptroller of Currency (OCC). The original effective date was intended to coincide with a full phase-in of FDIC risk-based capital measures in 2019.

The measure now moves to a conference with a Senate version, included in that body’s already approved National Defense Authorization Act (NDAA).

H.R. 5841, the Foreign Investment Risk Review Modernization Act