NCUA Makes Minor Changes to Rules Including Rule on Capital Adequacy

Among others, the final rule removes amendatory instruction 11 from the NCUA's risk-based capital rule. That instruction directs the Federal Register to edit a section reference in § 702.504(b)(4) of the NCUA's regulations. However, the Board recently removed § 702.504(b)(4) and redesignated paragraphs (b)(5) and (6) as (b)(4) and (5), respectively, as part of the capital planning and stress testing rule. Accordingly, there is no longer a corresponding section reference for the Federal Register to amend. To avoid an editorial note in § 702.504 highlighting this discrepancy, the final rule withdraws instruction 11.

Additionally, the final rule corrects an inaccurate cross-reference in § 741.3(b)(5) of the NCUA's regulations. That provision directs stakeholders to Appendix B to part 741 for guidance on how to develop an interest rate risk policy and an effective interest rate risk program. The NCUA's equity distribution rule eliminated Appendix A to part 741 and redesignated Appendix B as Appendix A. Accordingly, the Board is amending § 741.3(b)(5) to include the correct cross-reference to current Appendix A to part 741 which contains the NCUA's guidance on interest rate risk policies.

Related Link: Federal Register Notice

Effective Date: February 05, 2019

Keywords: Americas, US, Banking, Insurance, Capital Adequacy, Interest Rate Risk, Credit Unions, NCUA