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NCUA proposes amendment to RBC rule, issues RFI on digital assets, tech
The NCUA Board Thursday unanimously approved a proposed rule amending the agency's 2015 final risk-based capital (RBC) rule to provide a simple measure of capital adequacy for complex credit unions with total assets greater than $500 million. NAFCU has previously met with the NCUA to discuss this topic and offered support for amendments to the RBC rule; however, NAFCU agrees with Board Member Rodney Hood's suggestion that the board consider repealing the RBC rule entirely.
The proposed rule also:
- addresses risk weighting for asset securitizations issued by credit unions;
- clarifies the treatment of off-balance sheet exposures;
- permits the deduction of certain mortgage servicing assets from a complex credit union’s risk-based capital numerator;
- updates several derivative-related definitions; and
- clarifies the definition of a consumer loan.
Absent a repeal of the RBC rule, the association will continue to advocate for further revisions to the RBC rule, specifically for goodwill to be included in the numerator portion of the complex credit union leverage ratio (CCULR) calculation.
In addition, the board issued a request for information (RFI) regarding digital assets and related technologies. The agency noted it is seeking broad industry feedback on the current and potential impact of emerging technologies on credit unions, related entities, and the NCUA.
NAFCU has met with Vice Chairman Kyle Hauptman and Board Member Rodney Hood separately to discuss allowing credit unions the flexibility to partner with fintech companies, while also balancing the potential risks associated with them.
The association will continue to work closely with the NCUA to ensure credit unions have the resources, guidance, and flexibility needed to effectively serve their members as recovery from the coronavirus pandemic ends and into the future.