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August 02, 2018

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. 


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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

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