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NCUA agenda includes final rules related to CCULR, mortgage servicing rights, subordinated debt
The NCUA Board next week is set to issue three final rules, one regarding the complex credit union leverage ratio (CCULR), one regarding mortgage servicing assets, and one regarding subordinated debt. Also on the agenda, the board will consider the agency's 2022-2023 budget and the state of the share insurance fund.
The meeting, scheduled to begin at 10 a.m. Eastern, will be available via livestream on the agency's website.
On CCULR, NAFCU wrote to the NCUA in response to its initial proposal highlighting concerns with the adoption of CCULR. The association stated that with a significantly higher leverage ratio compared to the Community Bank Leverage Ratio (CBLR), the rule will only provide marginal relief to qualifying complex credit unions. NAFCU also outlined several recommended changes to the CCULR to ensure it offers meaningful capital relief for credit unions.
The association has previously met with the NCUA to discuss this topic and offered support for amendments to the RBC rule.
On subordinated debt, the board approved a proposed rule that would amend the definition of “grandfathered secondary capital” to include secondary capital issued to the U.S. Government or one of its subdivisions under an application approved before Jan. 1, 2022 during the board’s September meeting. For more information, view the association’s Regulatory Alert breaking down the proposed rule.
The association offered support for the proposal; however, the association stated it does not support a maximum maturity for ECIP investments that truncates the useful life of the funding as regulatory capital.
On mortgage servicing rights, the NCUA in December of 2020 approved issuing a proposed rule to amend the agency's investment regulation to allow eligible FCUs to purchase the mortgage servicing rights of loans that the FCU is otherwise empowered to grant, provided the investments are safe and sound and align with the FCU's policies and procedures related to the risk of the investments and servicing practices.
NAFCU sent a letter to the NCUA to offer support for the proposal and sent members a Regulatory Alert breaking down the proposal.
On the 2022-2023 budget, NAFCU Vice President of Regulatory Affairs Ann Kossachev Wednesday participated in the agency’s public budget hearing and sent a letter outlining shared credit union concerns and recommendations on how to tailor the budget to be more cost-effective.
NAFCU will monitor next week's meeting and update credit unions the latest from the NCUA.