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"Statutory changes are required to provide credit unions with a modern capital regime," NAFCU President and CEO Dan Berger told the NCUA in a letter Friday regarding its risk-based capital (RBC) proposal. Adding that, the agency's 2015 rulemaking should be revised or withdrawn prior to its implementation date of Jan. 1.

Berger explained that NAFCU, its committees and board thoroughly reviewed credit unions' capital with the goal of suggesting changes to the NCUA's rules. However, since the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155) made changes to bank capital, more study on the subject is now required from a parity perspective.

"Based on these circumstances, NAFCU believes that further changes to the capital rule are warranted beyond what NCUA has proposed in its current rulemaking," Berger wrote. "Although NAFCU recognizes that the NCUA Board is not currently contemplating changes beyond what it has proposed, NAFCU strongly urges the NCUA to consider its entire rulemaking anew."  

As proposed, the NCUA Board's latest rulemaking would delay the RBC rule's effective date by one year and also change the definition of a complex credit union from $100 million to $500 million. Berger said NAFCU is supportive of a one-year delay of the RBC rule but believes a two-year delay would allow "credit unions the time they need to make any adjustments and preparations to come into compliance."

NAFCU's award-winning advocacy efforts have led to congressional action to obtain a two-year RBC delay; this provision has passed the House three times.

Among other comments on the proposal, Berger said NAFCU's study of capital rules led to a similar definition of "complex" to what is being proposed but the association does not support a definition that divides the industry with a fixed asset threshold. He also asked the NCUA Board to expand the proposed one-year delay to include the grandfathering of "excluded goodwill" and "excluded other intangible assets," which were originally set to expire on Jan. 1, 2029, in the final rule.

Berger's complete letter can be read here.