In a move strongly opposed by the American Bankers Association, the National Credit Union Administration by a 2 to 1 margin today voted to delay the effective date of the 2015 risk-based capital rule until January 1, 2022. This is the second time NCUA has voted to delay the rule. Comments on the NCUA’s proposal will be due 30 days after publication in the Federal Register.
Following the vote, ABA President and CEO Rob Nichols sharply criticized NCUA’s action, noting that it serves to perpetuate the already-tilted playing field between credit unions and banks. “Since 2014, every bank in the country has had to adopt and comply with risk-based capital rules recommended by regulators around the world,” Nichols said. “It defies simple logic that the NCUA would propose again to delay imposing comparable rules for the nation’s credit unions, when the agency is simultaneously allowing and encouraging credit unions to operate exactly like banks.”
During the meeting, NCUA board member Todd Harper—who cast the lone dissenting vote—excoriated his fellow board members for supporting the delay, warning that another recession could be looming on the horizon. “We are forgetting the past repeatedly, just like characters in Groundhog Day,” he said. “After a decade of work on a new risk-based capital regime, the Great Recession and the recent taxi medallion credit union failures, it is time for us to move ahead. To protect taxpayers, federally insured credit unions and their members, we should no longer wait.”
In addition to delaying the risk-based capital rules, the NCUA board also signaled its intention to move ahead with its proposal on outside for-profit investor capital—which ABA will also strongly oppose—before the end of the year. “Today’s action by the NCUA only adds to the long list of reasons why members of Congress need to question whether this regulator is doing its job or simply promoting the runaway growth of an industry it’s supposed to be overseeing,” Nichols said.