National Credit Union Administration Chairman Todd Harper thinks the proposed rule is “half-baked” but credit union trade groups are endorsing a proposal to increase the threshold for credit unions to be defined as “complex.” The proposed rule states that any risk-based net worth requirement would only apply if a credit union has more than $500 million in assets at a quarter’s end. The definition impacts the effect of the Risk-Based Capital Rule that goes into effect on Jan. 1, 2022.
Credit unions might be forced to decline members or their deposits if the NCUA does not take action to ease credit union net worth ratio problems caused by the pandemic, CUNA and the American Association of Credit Union Leagues warned late last week.
The American Bankers Association would like the National Credit Union Administration to extend the comment period on a proposed rule that would allow CUSOs to originate any type of loan that a federal credit union may originate. The current comment period ends on March 29 and the ABA wants it extended until May 28.
In a letter to National Credit Union Administration Chairman Todd Harper, Sen. Pat Toomey, the ranking Republican on the Senate Banking Committee, said that the Modern Examination and Risk Identification Tool (MERIT) should be used for examinations as soon as possible, even if the training for it is done virtually.
In a letter to the Senate Banking Committee and the House Financial Services Committee, Curt Long of the National Association of Federally-Insured Credit Unions argues that the National Credit Union Administration’s equity ratio will bounce back. Therefore NAFCU is opposed to a credit union premium assessment.
At the February National Credit Union Administration meeting it was reported that the equity ratio dropped to 1.26%. The board did not immediately impose a premium, but Chairman Todd Harper noted that it may eventually be required. A restoration plan is legally required if the equity ratio dips below 1.2%. Other issues were also reported and discussed at the meeting.
The National Association of Federally-Insured Credit Union’s Curt Long is predicting that the National Credit Union Association’s Share Insurance Fund will be strong enough that a new premium will not be needed. The official word on this will come at the NCUA’s board meeting on February 18.
The Credit Union National Association and the National Association of Federally-Insured Credit Unions have been letting the Biden administration and legislators know the actions they believe will help credit unions help their members during the pandemic. These lists are extensive, but may be tough to achieve with an administration focused on tightening up financial regulations.
Credit union trade groups like a National Credit Union Administration proposed rule that would allow federal credit unions to purchase mortgage servicing rights from other federally-insured credit unions. NCUA Chairman Todd Harper is worried about the risks associated with mortgage servicing.
The National Association of Federally-Insured Credit Unions and the Credit Union National Association comment on the combined economic stimulus bill and the FY21 appropriations bill that passed the House and Senate yesterday.