NASCUS PRESIDENT & CEO LUCY ITO ON THE DECEMBER NCUA BOARD MEETING

December 12, 2019

NASCUS PRESIDENT & CEO LUCY ITO ON THE DECEMBER NCUA BOARD MEETING

ARLINGTON, Va. – Today, the NCUA Board approved the 2020-2021 Budget and delayed the effective date of its Risk Based Capital Rule to January 1, 2022. The Board also heard a briefing on 2020 National Credit Union Share Insurance Fund Normal Operating Level.

NASCUS President and CEO Lucy Ito issued the following statements in response to today’s meeting.

On the approved 2020 – 2021 Budget:

“NASCUS appreciates additional detail provided in NCUA’s budget justification on what factors contributed to the increase of the overhead transfer rate (OTR) from 60.5% in 2019 to 61.3% in 2020.  Going forward, NASCUS looks forward to working with NCUA to more accurately project the likely costs associated with State Supervisory Agencies.”

On the delay of the Risk-Based Capital Rule to 2022:

“While we understand the need for time to develop a comprehensive capital framework, we are disappointed that the Risk-Based Capital (RBC) Rule will be delayed for two additional years until 2022. The economy is stable now and it appears it will be stable in 2020. However, that may not be the case in 2021 or 2022. Capital reform should be in place ahead of the next economic downturn to help credit unions buffer the impact of higher unemployment, decreases in house values, etc.  That said, we are encouraged that the Board shared its intended timeline for releasing proposals for a subordinated debt rule (January 2020)and a credit union alternative to the community bank leverage ratio (February 2020). Perhaps if NCUA resolves the related capital issues, it will be in a position to re-consider implementing the RBC rule prior to the current January 1, 2022 effective date.”

Information Contact:

Shelton Roulhac, Vice President, Communications, sroulhac@nascus.org  or (703) 528-5974

NASCUS is the national association that advocates for a strong and healthy state credit union system, and whose members include state regulatory agencies, credit unions, credit union leagues, and organizations that support the state credit union system.