In a letter to the National Credit Union Administration board Friday, the American Bankers Association expressed grave concern over NCUA’s recent vote to delay for a second time the required implementation of the 2015 risk-based capital rules. ABA pointed out that a robust risk-based capital regime is critical to the safety and soundness of the credit union industry and the public resources that support it. With the current economic cycle poised to shift at any time, ABA urged NCUA to implement the rule before the next downturn.
ABA has long criticized NCUA for repeatedly postponing the rule’s effective date, particularly at a time when the credit union regulator is simultaneously pursuing additional rulemakings allowing credit unions to operate more like banks. In the letter, ABA posed a series of questions for the NCUA to respond to regarding the delay, noting that the agency is required under the Administrative Procedure Act to address each one in detail prior to finalizing the delay.
Of particular concern are findings from the Government Accountability Office, NCUA’s Inspector General and other observers that have found the agency’s existing rules to be substandard, ABA noted. In addition, a report by respected analyst Karen Shaw Petrou and her firm, Federal Financial Analytics, recently uncovered several troubling findings about the industry, including problems with the NCUA’s capital requirements and other safety and soundness rules.