COLUMBIA, Md.–The Maryland/DC Credit Union Association has become the latest state league to call on Congress to pass HR 2769, the Risk-Based Capital Study Act of 2015, which is also known as the “Stop and Study” bill.
That bill would require NCUA to study and report to Congress on whether the agency has the legal authority to issue a two-tier proposal, how RBC2 compares to bank capital requirements, the rationale behind the risk-weighting used by the agency, and the impact the proposal will have on credit unions’ capital cushions.
The legislation has the backing of NAFCU, but is not being actively supported by CUNA.
In a letter to all eight members of the House from Maryland, as well as Eleanor Holmes Norton, who represents DC , MDDCCUA CEO John Bratsakis said that while NCUA’s revised risk-based capital proposal is “much improved” from the original plan, it continues to “cause great concern to our members both large and small for the effect on their operations. In our view, this so-called ‘Stop and Study’ bill is a worthwhile and needed directive to the NCUA to take a temporary pause to review regulations, that when finally put into place will be the most far-reaching and problematic set of regulations ever proposed by the agency.
“The increased restrictions and costs placed on credit unions under the RBC2 regulations, in particular the capital requirements, will be an allocation of resources that will not then be directed to credit union members who are seeking loans with lower interest rates, or other lower cost financial services,” Bratsakis added.
Bratsakis said the goal is to improve the final RBC regulations, and noted while some of “our friends in the banking industry may resort to unproductive name calling by referring to the NCUA as ‘enablers’ for our industry. However, we believe that our industry must continue to work closely with the NCUA through this process and in the future to ensure that credit unions continue to serve as viable financial institutions, accessible by small businesses, individuals and families of all income levels.”