NCUA Approves Delay of Risk-Based Capital Rules Until January 2022
The NCUA Board held its eleventh open meeting of 2019 and approved a final rule to delay the effective date of the risk-based capital rules for credit unions to January 01, 2022. During the extended delay period, the current prompt corrective action requirements of NCUA will remain in effect. The final rule delays, until January 01, 2022, the effective date of the risk-based capital rule that was published in October 2015 (2015 final rule) and the supplemental risk-based capital rule that was published in November 2018 (supplemental rule).
The October 2015 final rule amends Part 702 of the current prompt corrective action regulations of NCUA that require credit unions taking certain risks to hold capital commensurate with those risks. The risk-based capital provisions of the 2015 final rule apply to only federally insured, natural-person credit unions with quarter-end total assets exceeding USD 100 million. NCUA had originally set the effective date of the 2015 final rule for January 01, 2019. NCUA then issued the supplemental rule in November 2018 to delay the effective date of the 2015 final rule to January 01, 2020. This supplemental rule also amended the definition of complex credit union by increasing the threshold level for coverage from USD 100 million to USD 500 million.
Post that, at the June 2019 meeting, NCUA approved another proposed rule to delay the effective date. NCUA received 29 comment letters in response to the proposed rule. Nearly all respondents supported giving credit unions additional time to comply with the requirements of the 2015 final rule. Most of these respondents also supported the Board’s plan to consider credit union capital standards holistically. Consequently, NCUA has now approved this two-year delay in the effective date for risk-based capital rules.
Related Links
Effective Date: January 01, 2022
Keywords: Americas, US, Banking, Credit Unions, Risk-Based Capital Rule, Regulatory Capital, NCUA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Related Articles
BIS Innovation Hub Sets Out Work Program for 2021
BIS Innovation Hub published the work program for 2021, with focus on suptech and regtech, next-generation financial market infrastructure, central bank digital currencies, open finance, green finance, and cyber security.
EC Plans to Consult on Crisis Management and EDIS Framework Revisions
In an article published by SRB, Mairead McGuinness, the European Commissioner for Financial Services, Financial Stability, and Capital Markets Union, discussed the progress and next steps toward completion of the Banking Union.
EBA Finalizes Remuneration Standards for Investment Firms in EU
EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).
ECA Recommends Actions to Enhance Resolution Planning for Banks
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE Publishes Key Elements of the 2021 Stress Testing for Banks in UK
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA Proposes Rules on Identity Verification of Depositor Protection
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB Publishes Work Program for 2021
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FCA Issues Update on Move to New Data Collection Platform
FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.
Bundesbank Publishes Derivation Rules for Reporting by Banks
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
FED Revises Capital Planning and Stress Testing Requirements for Banks
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
