NCUA is channeling the old saw, “it’s better to beg for forgiveness than to ask for permission,” with its decision to finalize its controversial risk-based capital rule despite Congress being right in the middle of considering legislation that would require the agency to stop what it’s doing on RBC and study the potential impact first.
The “Stop and Study” bill would effectively delay RBC for up to a year or more—time during which a change in the presidency could mean a change in leadership at NCUA and, in turn, a change in the agency’s approach to risk-based capital.
Of course, the very first editor I ever worked for, on his last day of work before his successor took over, said to me, “just remember, Lisa, if you don’t like who you’re working for now, it can always get worse.”
Still, many critics of NCUA’s RBC rule are thinking that just about anything would be better than what we’ve got now and, surely, there were those who hoped that delaying RBC long enough might prove fatal to the proposal altogether.
NCUA must also have realized the chance that “Stop and Study” could be tantamount to “Stop,” period. Rather than risk the odds that Congress would approve the legislation, which was passed out of committee by a vote of 50 to 9, NCUA chose to circumvent that possibility by finalizing the rule before Congress could act on the bill.
According to a letter to NCUA Chairman Debbie Matz from House Financial Services Committee Chairman Jeb Hensarling, the co-sponsors of “Stop and Study” asked NCUA to voluntarily comply with the call to study the rule’s impact before finalizing it. Matz’s response, according to the Hensarling letter, was the agency would be happy to comply … after the final rule is approved.
Certainly, NCUA could make the point that the agency has, in fact, already studied the potential impact of its rule—something I imagine it typically does with any rule it is adopting.
But in his letter, Hensarling also said NCUA’s “utter disregard” for Congress is all the more disturbing as it comes at the same time the agency is asking Congress for oversight of third-party vendors who serve credit unions.
It will be interesting to see if NCUA winds up having to beg for forgiveness, because there’s also another old saw that comes to mind—the one about having to pay the piper.
Editor in Chief Lisa Freeman can be reached at
