NCUA proposed a rule that would amend its previously revised regulations on prompt corrective action (PCA). The proposal would delay the effective date of the October 29, 2015 final rule on risk-based capital (the 2015 Final Rule) for one year, moving the effective date from January 01, 2019 to January 01, 2020. During the extended delay period, the current PCA requirements of NCUA would remain in effect. Comments must be received within 30 days of publication in the Federal Register.
The proposal would also amend the definition of a “complex” credit union adopted in the 2015 Final Rule for risk-based capital purposes by increasing the threshold level for coverage from USD 100 million to USD 500 million. These proposed changes would provide covered credit unions and NCUA with additional time to prepare for the implementation of the rule and would exempt an additional 1,026 credit unions from the rule, without subjecting the National Credit Union Share Insurance Fund (NCUSIF) to undue risk. Consequently, 90% of credit unions—based on December 31, 2017, Call Report data—would be exempt from the rule. Under the proposed rule, more than 98% of all complex credit unions would be considered well-capitalized.
The overarching intent of the 2015 Final Rule has been to reduce the likelihood that a relatively small number of high-risk outlier credit unions would exhaust their capital and cause large losses to the NCUSIF.
Comment Due Date: FR + 30 Days
Effective Date: January 01, 2020 (proposed)
Keywords: Americas, US, Banking, Credit Unions, Risk-based Capital Rule, Implementation Timeline, Asset Threshold, Prompt Corrective Action, NCUA
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.
BCBS and FSB published a report on supervisory issues associated with benchmark transition.
IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.
ESMA updated the reporting manual on the European Single Electronic Format (ESEF).
EBA published a statement on resolution planning in light of the COVID-19 pandemic.
BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework
ECB published a guideline (2020/97), in the Official Journal of European Union, on the definition of materiality threshold for credit obligations past due for less significant institutions.
FED temporarily revised the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes in response to the COVID-19 pandemic.