ARLINGTON, Va. — With NCUA expected to impose a final rule on stress testing at
In October, NCUA proposed to require all federally insured credit unions with assets north of $10 billion to develop and maintain capital plans, and undergo annual stress tests.
In a letter to the NCUA board Monday, NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt termed the new rule "inappropriate," "costly" and "unnecessary" for covered credit unions.
"It is unclear how this proposal will interplay with the NCUA's recently proposed risk-based capital rule," Hunt wrote. "As such, NAFCU suggests that the stress testing rule be delayed until there is greater clarity on the direction of the risk-based capital rule."
Hunt outlined additional problems, such as NCUA relying on independent third-party modelers, stating that NAFCU opposes the stress testing and capital planning proposal in its current form and "recommends that the NCUA not adopt it."
While Hunt agreed there are benefits to stress testing, the cost — which NCUA estimates at about $1 million the first year and $500,000 after that — outweigh the advantages.
She also recommended that instead of selecting a third party to conduct the tests, NCUA should allow the covered credit unions to continue to conduct their own stress tests, with NCUA could later reviewing the assumptions and processes underlying the tests.
CUNA, as well, has stated its opposition to the proposed stress test rule.
