WASHINGTON — NCUA Board Member Rick Metsger said Wednesday he favors doubling the implementation period, which would create a de-facto second comment period on the agency's controversial risk-based capital rule.
Speaking at NAFCU's Congressional Caucus here, Metsger said he was "committed to" a longer implementation period, noting that doubling that window from 18 months to three years would give credit unions the opportunity to comment on the revised rule before it is fully implemented, "and that's something I think would be an additional benefit."
Because all NCUA rules are subject to a rolling review every three years, if the risk-based capital rule is finalized with a three-year implementation timeline, that would mean it would be up for review — and comment — before it is actually implemented.
The longer implementation period would also provide time for CUs to raise additional capital, allow institutions the opportunity to better understand the changes that will need to be made to Call Reports and then to "beta test" those reports to make sure they are user-friendly.
Metsger also called for pulling the interest-rate risk provisions out of the RBC rule so that they could be dealt with in a completely separate proposed rule, which would then allow credit unions a second opportunity to comment on those provisions as part of a separate rule.
NCUA's vice chair added that while the original estimate was that the RBC rule would impact 200 credit unions, he said he now believes that fewer than 100 institutions will be impacted.
While the risk-based capital proposal has received the lion's share of attention compared to most NCUA initiatives during the past year, Metsger noted that most of the regulator's other actions during the last year have given credit unions more power and more flexibility to serve their members, such addressing elements of NAFCU's "Dirty Dozen" list of regulations the trade group has asked to see reformed.
Though NCUA Chairman Debbie Matz has previously indicated she also favors extending the implementation period, she has asserted that there will be no need for a second comment period.
Metsger's statement that an additional comment period would be helpful is the first sign that the agency might consider giving credit unions the opportunity to review the rule after it has been revised and before it is implemented — something many credit unions have been lobbying for vehemently.
