Sherrod Brown dings NCUA over risk-based capital delay
One prominent lawmaker is speaking out against the National Credit Union Administration’s decision last week to further delay implementation of its controversial risk-based capital rule.
During its June open board meeting, NCUA officials approved a plan that would delay implementation of the rule until Jan. 1, 2022, while creating additional time to review wider capital standards. The rule was originally set to take effect in 2019, but late last year the board approved a delay until 2020.
Sen. Sherrod Brown, D-Ohio, criticized that decision.
“I am disturbed that ten years after the financial crisis, the NCUA is once again delaying important rules to increase capital at large credit unions,” Brown said in a statement.
During Thursday’s board meeting, board member Todd Harper chastised other members of the board for delaying implementation and continuing to focus on capital matters that affect a relatively small number of institutions.
Instead, suggested Harper, the panel should focus on safety and soundness issues that have a wider impact on the industry. One particular scenario Harper highlighted was issues of concentration risk, such as recent failures at credit unions holding high concentrations of taxi medallion loans, which cost the National Credit Union Share Insurance Fund more than $750 million.
“I commend board member Harper for opposing this unnecessary extension and demanding that NCUA focus on strengthening supervision and identifying risks to credit unions,” Brown said.