MD|DC Credit Union Association & Cooperative Credit Union Association Issue Joint Letter to NCUA Urging Delay of the Risk Based Capital Rule

The MD|DC Credit Union Association (MD|DC CUA) and Cooperative Credit Union Association (CCUA) today issued a joint letter to the National Credit Union Administration (NCUA), calling on the agency to delay implementation of the risk-based capital rule (RBC) and raise the threshold for complex credit unions to $500 million.

The joint letter requests a five to seven-year timeframe for credit unions to implement the significant changes necessary to adjust to the new rule. MD|DC CUA and CCUA assert that the current date of January 1, 2019 does not provide sufficient time to prepare for a rule that impacts all levels of a credit union’s operations.

In the letter, MD|DC CUA and CCUA also request that the asset threshold be increased from $100 million to at least $500 million, subjecting fewer credit unions to RBC. MD|DC CUA and CCUA maintain that, “Consideration must be given to the composition of portfolios and products and services offered to better identify complex credit union profiles.”

The letter maintains that the credit union industry is strong and experiencing consistent growth but raises concern that RBC will have a chilling impact on the industry by changing the way credit unions think about capital.

“It is imperative that any final risk-based capital rule properly balance potential NCUSIF losses with the vision of a credit union’s management and Board to develop and implement strategic plans and products and services that best serve its membership, and it is our position that the current proposal does not strike that balance,” the letter concludes.

MD|DC CUA has long advocated for modifying and delaying implementation of the NCUA’s risk based capital rule. In 2014, the Association, along with 37 member credit unions, submitted comments letters on RBC I and engaged with lawmakers on Capitol Hill. When RBC II was proposed the following year, the Association helped coordinate comment letters from 30 credit unions and submitted an op-ed. The Association also supported the so-called ‘stop and study’ bill that would have required a comprehensive study to ensure RBC would not unnecessarily burden credit unions and their members.

“The time is right to advocate on this issue to protect credit unions and their members from the negative impact of RBC,” said MD|DC Credit Union Association President and CEO John Bratsakis. “NCUA Chair McWatters wants the board to revisit RBC, and Congress is considering legislation to delay implementation by two years. We appreciate the support of the Cooperative Credit Union Association in joining with us to elevate the credit union voice on this issue.”


Original Post Date- June 27, 2018