Featured Product

    NCUA Proposes to Amend Risk-Based Capital Rule for Credit Unions

    March 10, 2020

    The NCUA Board is proposing to amend various parts of its regulations to permit low-income designated credit unions, complex credit unions, and new credit unions to issue subordinated debt for purposes of regulatory capital treatment. The proposed rule would create a new subpart in the final risk-based capital rule that would address the requirements for and regulatory capital treatment of subordinated debt. Comments must be received by July 08, 2020. The final risk-based capital rule will become effective on January 01, 2022.

    The new subpart would, among other things, contain requirements related to applying for authority to issue subordinated debt, credit union eligibility to issue subordinated debt, prepayments, disclosures, securities laws, and the terms of a subordinated debt note. The proposed rule also makes various additions and amendments to other parts and sections of the NCUA regulations. The rule would include:

    • a new section addressing limits on loans to other credit unions
    • a grandfathering of any secondary capital issued before the effective date of a final subordinated debt rule
    • an expansion of the borrowing rule to clarify that federal credit unions can borrow from any source
    • revisions to the risk based capital rule and the payout priorities in an involuntary liquidation rule to account for subordinated debt and grandfathered secondary capital
    • cohering changes to part 741 to account for the other changes proposed in this rule that apply to federally insured, state-chartered credit unions

    All secondary capital issued after the effective date of a final subordinated debt rule would be subject to the requirements for subordinated debt. This change would not impact the ability of a low-income designated credit union to include such instruments in its net worth. The proposal would also preserve the regulatory capital treatment of grandfathered secondary capital for 20 years after the effective date of a final subordinated debt rule. For ease of reference, the requirements in the current secondary capital rule would be moved from their current location to a section in the new proposed subpart. These additional regulatory changes were necessary to ensure that this proposal represents a comprehensive review and revision of the NCUA regulations to appropriately account for subordinated debt.

     

    Related Link: Federal Register Notice

    Comment Due Date: July 08, 2020

    Effective Date: January 01, 2022

    Keywords: Americas, US, Banking, Credit Unions, Subordinated Debt, Risk-Based Capital Rule, Regulatory Capital, NCUA

    Featured Experts
    Related Articles
    News

    EC Issues Regulation on Adjustments to K-Factor Coefficients Under IFR

    The European Commission (EC) published a report summarizing responses to the targeted consultation on the supervisory convergence and the single rulebook in the European Union (EU).

    January 20, 2022 WebPage Regulatory News
    News

    OSFI Issues Results of Pilot on Climate Risk Scenario Analysis

    The Office of the Superintendent of Financial Institutions (OSFI) published an update on the discussion paper that intended to engage federally regulated financial institutions and other interested stakeholders in a dialog with OSFI, to proactively enhance and align assurance expectations over key regulatory returns.

    January 20, 2022 WebPage Regulatory News
    News

    ECB Issues Opinions on Green Bonds Standard and CRR Proposals

    The European Central Bank (ECB) published its opinion on a proposal for a regulation on European green bonds, following a request from the European Parliament.

    January 19, 2022 WebPage Regulatory News
    News

    ESRB Explores Policy Response to Risks Arising from Digitalization

    The Advisory Scientific Committee (ASC) of the European Systemic Risk Board (ESRB) published a report that explores the expected impact of digitalization on provision of financial and banking services, and proposes policy measures to address the risks stemming from digitalization.

    January 18, 2022 WebPage Regulatory News
    News

    EU Authorities Address COVID-19 Reporting, MCD, and PSD2 Issues

    The European Banking Authority (EBA) announced that the guidelines on the reporting and disclosure of exposures subject to measures COVID-relief measures shall continue to apply until further notice.

    January 17, 2022 WebPage Regulatory News
    News

    FI Publishes Multiple Regulatory and Reporting Updates

    The Swedish Financial Supervisory Authority (FI) announced that the capital adequacy reporting as at December 31, 2021 must be done by February 11, 2022.

    January 17, 2022 WebPage Regulatory News
    News

    BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance

    The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.

    January 16, 2022 WebPage Regulatory News
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).

    January 13, 2022 WebPage Regulatory News
    News

    MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.

    January 13, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7875