A proposal raising from $10 billion to $15 billion the asset size of certain federally insured credit unions (FICUs) whose supervision is handled by an office assigned to large, complex institutions is out for public comment until May 2, according to a notice published in Thursday’s Federal Register.
The proposed rule by the National Credit Union Administration (NCUA) Board would affect which institutions the agency designates for supervision by its Office of National Examinations and Supervision (ONES). ONES was established in 2013 to oversee the largest and most complex credit unions in the credit union system.
While it also supervises the corporate credit union system, last month’s proposed rule does not apply to corporates (which carry out a function similar to “bankers’ banks”).
As the agency notes in a proposed rule summary, this proposal would provide that FICUs with less than $15 billion in total assets (tier I FICUs) not currently supervised by ONES will be supervised by the appropriate NCUA regional office. Tier I FICUs currently supervised by ONES and FICUs with $15 billion and more in total assets (tier II and tier III FICUs) would continue to be supervised by ONES.
The NCUA said the proposed rule would also not alter any regulatory requirements for covered credit unions.
The agency indicated it was making the proposal in response to brisk asset growth by the very large credit unions, as opposed to smaller ones, during the coronavirus crisis. Without this rule change, the agency said in February, at least nine new federally insured credit unions will meet or exceed the $10 billion threshold and become subject to supervision by ONES starting Jan. 1, 2023.
The smaller credit unions not supervised by ONES are supervised by their NCUA regional office.
The NCUA said it does not believe that altering the threshold for ONES coverage will result in undue risk to the credit union savings insurance fund, the National Credit Union Share Insurance Fund (NCUSIF).