CUNA reversed its position on H.R. 2769, the Risk-Based Capital Study Act, in a letter Tuesday to the House Financial Services Committee. The trade association had previously said while it supports the bill's sponsors, it does not support the bill because the chances of its success are remote.
The legislation would direct the NCUA to re-evaluate its proposed RBC rule, justify its merits and explain the agency's authority to impose the capital requirement on credit unions.
“We've heard from our members on the very significant concerns they have regarding NCUA's revised proposal to update risk-based capital standards for credit unions,” CUNA Chief Advocacy Officer Ryan Donovan said in a release. “As we move closer to a final proposal, we have growing concerns that (the) NCUA is not making as significant changes as we had hoped. We strongly believe that (the) NCUA's proposal must be consistent with the law and seek to minimize additional regulatory burden on credit unions.”
Additionally, the California and Nevada Credit Union Leagues, working with Rep. Juan Vargas (D-Calif.), put new pressure on the NCUA regarding its risk-based capital proposal.
Vargas' Sept. 18 letter, co-signed by 11 representatives from the California and Nevada congressional delegations, applauded the NCUA's desire to ensure credit unions are operating in a safe and sound environment, but questioned the capital standards in the proposed rule.
The letter took aim at how Congress defined adequate capital ratios and how the proposed rule undercut congressional intent.
The NCUA board is expected to finalize its RBC rule later this year.
“I'm happy to support a rule that allows credit unions to operate in a more secure environment,” Vargas said. “It is crucial that we continue to adopt a common-sense approach for risk-based capital that allows credit unions to continue servicing the millions of credit union account holders.”
Vargas is in his second term in Congress and is a member of the House Financial Services Committee.
“Regardless of revisions, credit unions are concerned about the long-term unintended consequences of this rule,” CCUL Vice President of Federal Government Affairs Jeremy Empol said. “The unintended consequence of other large regulatory rules has been plaguing the industry and we applaud Rep. Vargas for his effort to expose those with the NCUA. This is genuine Congressional action and leadership. We thank Rep. Vargas and the co-signers of this letter.”
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