Sen. Sherrod Brown (D-OH) is expressing displeasure with National Credit Union Administration’s (NCUA) decision to delay implementing its risk-based capital rule protecting the credit union system and its members.
The NCUA Board approved a proposal to extend the effective date of its risk-based capital rule to Jan. 1, 2022, the second time it has delayed the rule.
NCUA Board Member Todd Harper voted against the proposal, highlighting the importance of strong capital standards.
“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,” said Brown, ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs. “I commend Board Member Harper for opposing this unnecessary extension and demanding that NCUA focus on strengthening supervision and identifying risks to credit unions.”
The risk-based capital rule was finalized in October 2015 with an initial effective date of Jan. 1, 2019. In 2018, the NCUA delayed implementation of the rule to Jan. 1, 2020, and exempted credit unions with less than $500 million in assets, an increase from $100 million.
The Government Accountability Office (GAO) and the NCUA IG added the capital rules leading up to the financial crisis resulted in credit union failures.