The NCUA Board proposes to amend its regulations on capital planning and stress testing for federally insured credit unions with USD 10 billion or more in assets (covered credit unions). The proposal would reduce regulatory burden by removing some of the capital planning and stress testing requirements currently applicable to certain covered credit unions. Comments must be received on or before December 29, 2017.
The proposed changes reflect the NCUA's experiences in implementing the current rule's requirements, while also taking into consideration the systemic risk that covered credit unions pose to the National Credit Union Share Insurance Fund, or NCUSIF. Additionally, the proposal would make the NCUA's capital planning and stress testing requirements more efficient for covered credit unions. The proposal would also make these requirements more efficient for the NCUA by, among other things, authorizing credit unions to conduct their own stress tests in accordance with the NCUA's requirements and allowing those credit unions to incorporate the stress test results into their capital plan submissions. Under the proposal, covered credit unions would be subject to new tiered regulatory requirements that would further ensure their capital plans are tailored to reflect their size, complexity, and financial condition. Stress testing requirements under the proposal also would be tiered. Under the proposal, the NCUA would no longer conduct the annual supervisory stress tests on applicable covered credit unions. Instead, the covered credit unions themselves would conduct the stress tests.
Related Link: Proposed Rule (PDF)
Keywords: Americas, US, Banking, Insurance, Systemic Risk, Capital Planning, Stress Testing, Proposed Amendments, NCUSIF, NCUA
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