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Week ahead: Risk-based capital back on the agenda at NCUA

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There could be new developments this week on one of the credit union industry’s most controversial issues.

The National Credit Union Administration is expected to once again consider its controversial risk-based capital rule as part of its June open board meeting. First proposed in 2014, the rule received an onslaught of criticism, drawing more than 2,000 responses from across the industry. The proposal was subsequently amended but implementation has been delayed multiple times, first set for January of this year and then postponed until January 2020. Lawmakers also attached a provision to legislation last year that would have delayed implementation until 2021, but that never made it into law.

The content of this week’s hearing remains unknown, though some have speculated that the hearing could further delay when the rule goes into effect in order to study it further or combine a delay with new proposals related to credit union capital standards. NCUA Chairman Rodney Hood has indicated a willingness to push back implementation again, and with the board now at full capacity – two Republicans (Hood and former Chairman Mark McWatters) and a Democrat (Todd Harper) – there may be enough votes to move a proposal forward that did not exist during the three years the board was manned by just McWatters and former board member Rick Metsger. McWatters originally voted against the rule in 2015 but the 2018 supplemental rule, which included a provision to delay implementation, received unanimous approval from both board members. Given a Republican majority at the board for the first time in several years, along with Hood's willingness to reconsider RBC and a new Democratic voice on the panel, the board's new construction could think differently about the proposal than previous iterations.

Credit Union Journal will have full coverage of Thursday’s board meeting.

This week also marks the start of the annual summer conferences from both the Credit Union National Association and the National Association of Federally-Insured Credit Unions, in Orlando and New Orleans, respectively. More than 1,700 people are expected to be at the two events, and at least three smaller industry conferences are also taking place this week in various parts of the country.

Credit Union Journal will have coverage of these events throughout the week.

With the House and Senate both in session, talk around the Senate's version of the National Defense Authorization Act is expected. The House Armed Services Committee last week left out a proposed amendment that would have granted banks rent-free access to military installations. The Senate version of the NDAA still contains the same language that would grant banks this ability.

The Senate Banking Committee will also hold hearings on reauthorizing the terrorism risk insurance program and collecting beneficial ownership information, on Tuesday and Thursday, respectively. The latter continues Congress's bipartisan effort to draft anti-money- laundering legislation.

The House Financial Services Committee will hold a number of hearings, including one Wednesday on strengthening securities law.

This story was updated at 2:49 P.M. on June 17, 2019.

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