ALEXANDRIA, Va.–As NCUA promised, the agency Monday sent its report on the final risk based capital rule to the House Financial Services Committee—and the document includes recommendations for changes to the Federal Credit Union Act.
The 228-page report includes legislative recommendations to improve the capital system for credit unions. NCUA recommended that Congress allow well-managed credit unions to issue supplemental capital that will count as net worth. The agency also proposed technical changes to the current prompt corrective action statutory framework.
The report was in response to H.R. 2769, the Risk-Based Capital Study Act of 2015, better known as the “Stop & Study” bill. The document (available here in CUToday.info’s The Gov) contains an analysis of the agency’s legal authority to require a two-tiered risk-based capital system, a comparison of credit union and bank risk weights, a discussion of the rationale for each of the risk weights and an overview of how the proposed rule would apply to credit union capital buffers.
NCUA Board Chairman Debbie Matz in October committed to completing the report outlined in the bill. The House Financial Services Committee passed H.R. 2769 Sept. 30.
Reps. Stephen Fincher (R-TN), Denny Heck (D-WA), and Bill Posey (R-FL)—who introduced H.R. 2769—sent a letter to Matz Oct. 6 requesting the agency voluntarily study and report on several issues relating to the risk-based capital proposal before finalizing an RBC rule.
NCUA approved the final risk based capital rule at its October 2015 open board meeting. RBC goes into effect Jan. 1, 2019.
NAFCU said it continues to push Congress to create a legislative solution for capital reform.