A proposed rule on risk-based capital for credit unions is the sole item on the agenda of the June 20 open meeting of the National Credit Union Administration (NCUA) Board. Whether it’s a proposal to change the rule, currently set to take effect in early 2020, or provide yet another extension of the rule’s effective date has yet to be seen.
Federally insured credit unions are currently subject to a risk-based capital rule that isn’t slated to go into effect until next Jan. 1. In reported, written responses to questions from the Senate Banking Committee (related to his confirmation to the agency’s board), NCUA Board Chairman Rodney Hood suggested that implementation of this regulation could be delayed further so the rule can be reviewed for its impact on the credit union system.
Agency leaders had previously expressed interest in having the risk-based capital rule take effect the same date that some future rule on alternative capital would kick in. Meanwhile, a proposed rule on subordinated debt – one of the options the agency has looked at in its review of how to authorize alternative capital for some credit unions – was slated for release this month (according to the agency’s spring regulatory agenda).
Last year, the NCUA Board approved revisions in its 2015 risk-based capital rule that pushed the effective date from Jan. 1, 2019, to Jan. 1, 2020, and increased the asset threshold for “complex” credit unions subject to the rule from $100 million to $500 million. The agency said that increase exempted an additional 1,026 credit unions from risk-based capital requirements.