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NAFCU's RBC-delay provision advances in House Approps
NAFCU continues to make progress on protecting credit unions from the harmful effects of NCUA's risk-based capital (RBC) rule as the House Appropriations Subcommittee on Financial Services and General Government yesterday advanced to the full committee legislation that includes NAFCU-sought language to delay the implementation of the rule by two years.
The RBC language included comes from the Common Sense Capital Relief Act (H.R. 5288), which was introduced by Reps. Bill Posey, R-Fla., and Denny Heck, D-Wash., in March. NAFCU President and CEO Dan Berger met with Posey and Heck last week to thank them for their ongoing efforts to protect the industry from the adverse effects of this rule.
Ahead of the subcommittee's markup on the appropriations bill, NAFCU Vice President of Legislative Affairs Brad Thaler sent a letter urging members to support the provision. Thaler also requested that the subcommittee continue to fund the NCUA's Community Development Revolving Loan Fund at $2 million in FY2019, as was included in the bill. In the letter, Thaler expressed the association's appreciation for the $191 million funding level of the Treasury Department's Community Development Financial Institutions (CDFI), but asked the subcommittee to work to restore the FY2018 funding level of $250 million.
The RBC-delay provision is also included in the House Financial Services Committee-passed Foreign Investment Risk Review Modernization Act of 2018 (H.R. 5841). H.R. 5841, introduced by Rep. Robert Pittenger, R-N.C., deals with the Committee on Foreign Investment in the United States (CFIUS). U.S. Defense Secretary Jim Mattis has urged that CFIUS legislation be included in the National Defense Authorization Act (NDAA), which is currently under consideration in the House. NAFCU will continue to advocate for House members to include a delay of the RBC rule in the legislation.
While NAFCU supports an appropriate RBC system for credit unions, the NCUA's rule as written will have a negative impact on the credit union industry. The association has been opposed to NCUA's RBC rulemaking since its passage and has urged the rule be modified or effective date delayed, particularly because of increased regulatory burdens and costs.