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Final rules related to CECL, capitalization of interest on NCUA agenda
The NCUA Board this week is set to issue two final rules: one on the current expected credit loss (CECL) standard methodology and the second on capitalization of interest.
On CECL, the NCUA included a final rule on the phase-in of the CECL standard as part of its spring regulatory agenda. NAFCU has called on the NCUA to issue such a proposal as soon as possible and will continue to update credit unions on the latest regarding CECL implementation.
A finalized rule on capitalization of interest was also included in the agency's spring regulatory agenda. The board unanimously approved the publication of a proposed rule to allow the capitalization of interest in connection with loan workouts and modifications in November. NAFCU has consistently called on the NCUA to make this change and provide credit unions with much needed relief – during the pandemic and beyond – to help their members meet payment obligations on all types of member loans.
Also on the agenda, the board will discuss the federal credit union loan interest rate ceiling. During its January 2020 meeting, the board agreed to extend the 18 percent loan interest rate ceiling until Sept. 10, 2021. NAFCU continues to advocate for an increased interest rate ceiling to mitigate risk and increase borrowing opportunities, and also has encouraged the board to explore a floating or a variable interest rate.
The meeting, scheduled to begin Thursday at 10 a.m. Eastern, will be available via livestream on the agency's website. NAFCU will monitor this week's meeting and update credit unions on the latest from the NCUA.