CUNA expressed concerns on Monday over the cost of complying with the NCUA's proposed stress test rule, which would affect the four largest credit unions in the nation.
“The agency [NCUA] will be conducting the stress testing and it's going to cost, according to them, $4 million just in the first year to conduct this stress testing – that's $1 million for each one of them,” said Mary Dunn, CUNA senior vice president and deputy general counsel on a conference call Monday.
Dunn added, “We think it's really unclear – where did this number come from? Why is it going to cost so much and why is it necessary that the agency actually be the entity that conducts the stress testing?”
Dunn said the NCUA continues to indicate that they have talked to the four credit unions with more than $10 billion that are going to be subjected to stress testing from NCUA.
“We also are going to be talking to those credit unions because there are a number of concerns about the stress testing proposal,” said Dunn.
She said NCUA Board Member Michael Fryzel made a “really good point” at the October board meeting when he mentioned that these credit unions already conduct their own stress testing. When Fryzel asked what would happen if the test results conflict, Dunn said he did not receive a “great answer.” Scott Hunt, director of the Office of National Examinations and Supervision, said the NCUA's test would supersede a credit union's test.
Paul Gentile, executive vice president of strategic communications and engagement, downplayed the importance of the superiority of the NCUA's stress tests, saying CUNA does not support the need for the new regulation at all.
“Additionally, the proposed rule on stress testing is put forth by the agency even though the NCUA is aware that the largest credit unions already conduct stress testing on their own,” he said.
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