Removing Barriers Blog

CUNA Advocates Continue to Press NCUA
Posted November 02, 2015 by CUNA Advocacy

CUNA’s Bill Hampel, Chief Economist and chief Policy Officer, Elizabeth Eurgubian, Deputy Chief Advocacy Officer, and Andy Price, Sr. Director of Advocacy were present at NCUA’s Open Forum on Friday and pressed issues of concern to credit unions.  Issues such as the pending FASB rules on CECL,  Member Business rule (MBL), the exam cycle, TCPA and others were the focus of the discussion.  All three NCUA board members were present at the forum together with key senior staff from the NCUA.  Several representatives from Credit Union Leagues were also present. 

Larry Fazio, Director of Examination and Insurance, NCUA, stated “If FASB does adopt this [CECL}, and we expect them to, we do expect to see an increase in ALLL.  Under the statue net worth is defined as retained earnings, and that we cannot change.  As a result when you expense it, the net worth ratio will come down a little bit, or a lot.  So we will obviously put some guidance out to examiners and we will make it clear as part of the capital analysis if that is the only reason for the capital decline that is not something to worry about.  What we can’t change is if it causes credit unions to fall below the thresholds for PCA category.  We will have to take action as required, but could also take into consideration (the higher loan loss figure) in the net worth restoration plan.”

Fazio also commented that they anticipated issuing  extensive guidance to examiners in connection with the MBL rule that would contain “guideposts” but still allow credit unions the intended flexibility contemplated by the rule.  He also commented that with the pending ARIES upgrades and other technological enhancements including a secure portal to communicate with credit unions, their goal was to reduce the on-site portion of the exam.  This may ultimately lead to their ability to retreat from the annual examination requirement for some credit unions.

In connection with the FCC Order on TCPA, NCUA says that they have heard from CUNA and other credit unions about the concerns of the FCC’s order and are communicating with them about credit union issues.  Ultimately the Order belongs to another agency and they will need to act in order to provide relief.

Chairman Matz also alluded that more regulatory relief could come by the end of the year with their final Field of Membership rule and rule on Supplemental Capital.  She further stated that she did not anticipate a separate rule for Interest Rate Risk.  CUNA will continue to follow up with the NCUA on these and other issues.