NCUA board approves delay for Risk-Based Capital Rule to become effective in 2020


The NCUA board of directors held its ninth open meeting of 2018 yesterday and approved two items including: a supplemental final rule that amends the agency’s Risk-Based Capital rule to delay the effective date of the rule until Jan. 1, 2020, and raise the asset threshold for a complex credit union from $100 million to $500 million; and a proposed rule to clarify, update and simplify federal credit union bylaws.

Federally insured credit unions subject to the agency’s risk-based capital rule will have an additional year to prepare under a supplemental final rule approved by the board.

The supplemental final rule moves the effective date of the RBC approved in October 2015 to Jan. 1, 2020. During the one-year delay, NCUA’s current prompt corrective action requirements remain in effect.

“It was important to provide the final decisions on two of the critical pieces of the rule: the asset-size threshold and the effective date,” said Linda Bow, director of compliance for the New York Credit Union Association. “The final outcome to raise the asset size to greater than $500 million is a positive step towards regulatory relief for many credit unions. However, the Association still believes the asset threshold is too low, and in fact, we question the overall need for the rule.”

A slide presentation summarizing the final rule is available.

During yesterday’s meeting, the board also approved a proposed rule that would clarify, update and simplify federal credit union bylaws. The proposed rule clarifies bylaw provisions and provides detailed guidance to help credit union officials, employees and members better understand provisions, particularly a credit union’s ability to limit services to a disruptive or abusive member.

The Association is studying the proposal.

In a September comment letter on the agency’s Advanced Notice of Proposed Rulemaking on the matter, Association President/CEO William J. Mellin urged the agency to clarify precisely what powers credit unions have to remove disruptive and abusive credit union members.

For more information on Thursday’s board meeting, visit NCUA’s website.

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