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NCUA issues proposed rule on asset threshold determination
The NCUA Board Thursday unanimously approved a notice of proposed rulemaking to adjust the threshold used for determining whether a credit union will be supervised by the Office of National Examinations and Supervisions (ONES) from $10 billion in assets to $15 billion. To lessen any disruption, those credit unions subject to ONES supervision are “grandfathered” and remain subject to such supervision even if they are below the proposed $15 billion threshold.
“This proposed rule is a natural evolution in the agency’s examination program as the number of large, complex credit unions increases,” NCUA Chairman Todd Harper said. “It leverages the strengths of the agency’s regional structure to ensure the NCUA can effectively and efficiently monitor potential risks associated with these institutions with existing resource allocations and it provides proper oversight of those systemically critical credit unions, which pose a significant risk to the Share Insurance Fund because of their size and complexity.”
NAFCU has urged the NCUA to work with the CFPB to establish a uniform asset threshold measurement for credit unions crossing the $10 billion threshold, noting that adopting a longer, multi-quarter asset threshold measurement would help address inaccuracy risks from rapid, but possibly impermanent, share growth
Of note, the board also approved a renewal of an interim final rule (IFR) on prompt corrective action (PCA) that would extend the automatic expiration date to March 31, 2023 and extend certain regulatory requirements to ensure credit unions remain operational during the pandemic. This rule waives the earnings retention requirement for any credit union that is adequately capitalized and extends a provision that modifies specific documentation required for net worth restoration plans for credit unions that become undercapitalized.
This is the third time the NCUA has unanimously approved an IFR on PCA since the beginning of the COVID-19 pandemic. NAFCU has consistently urged the NCUA to extend the PCA IFR automatic expiration to allow credit unions ample time and operational flexibility to meet compounding share growth stresses as they emerge from the pandemic.
In addition, the NCUA staff briefed the board on the National Credit Union Share Insurance Fund (SIF) quarterly report.
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