ALEXANDRIA, Va. — NCUA announced the agency will issue its revised proposed rule on risk-based capital at its Jan. 15 board meeting.
"During the six months since the comment period closed on the original proposed rule, we've taken the time to carefully review and methodically evaluate the many thoughtful comments received from stakeholders," said NCUA Chairman Debbie Matz in a statement released late Friday. "We've also considered the input received during three Listening Sessions across the U.S. this summer. We're getting closer to issuing the revised proposed rule, which I now anticipate will be presented in January 2015 — one year since the original proposed rule. To provide the public ample time to review this important safety and soundness rulemaking, I intend to support a 90-day comment period."
The agency said the amended proposal will include a longer implementation period and revised risk weights for mortgages, investments, member business loans, credit union service organizations and corporate credit unions, among other changes.
Stakeholders will also be invited to comment on an alternative approach for addressing interest rate risk using the supervisory process.
Both Vice Chairman Rick Metsger and Board Member Mark McWatters told CU Journal they will also support the 90-comment period. "I support the chairman's position. My senior policy advisor and I want to make sure we have time to evaluate the voluminous material staff has prepared analyzing and responding to all the comments we received during the initial comment period," Metsger said. "This will give all three board members two months to evaluate the final proposal and make suggested changes before it is presented, which is a significant amount of time. It also will allow 90 days for comment on this new proposed rule, which is 50 percent longer than most comment periods. Everyone should have ample time to do their jobs thoroughly, especially since more than a year will have passed since an RBC rule was first proposed."
McWatters noted that while he supports reissuing the rule for comment, he is still exploring whether the agency has the authority to propose such a rule at all. "I am encouraged by the chairman's recent announcement that the proposed risk-based capital rule will be put out for a second comment period of 90 days," McWatters said. "I have repeatedly said that the impact of this rule on natural person credit unions is far too great to allow it to proceed without another review by those engaged in the industry and with the best insight on its impact. While I continue to review the legal authority of NCUA to propose such a rule, I eagerly await the comments, suggestions and input of all stakeholders."
Though Matz had previously been against reissuing the revised rule for a second comment period, she eventually agreed to do so after her Democratic colleague on the three-member board, Vice Chairman Metsger, indicated seeing "some value" in giving credit unions an opportunity to comment on the rule again before its implementation
Not long after that, the lone Republican on the board, Mark McWatters, said he would not vote for the rule without the second comment period — for which credit unions had vociferously and repeatedly pleaded with the agency to implement.
CUNA and NAFCU both applauded the decision to issue the revised rule for a second round of comments.