NCUA Board approves amendments to 2015 risk-based capital final rule, delay until 2020
The NCUA recently adjourned from their October board meeting and with respect to the impending RBC rule has approved action to raise the minimum impacted asset size from $100M to $500M. More importantly, however, they have delayed implementation from January 2019 to January 2020. Vic Pantea provided his thoughts on this decision:
“This action, in my humble opinion, will kill the entire RBC rule for the immediate future. I see a purely political compromise here that allows both McWatters and Metsger to gain satisfaction. McWatters who argued strongly, back in 2015, that the board did not have the authority to implement RBC, cannot reverse implementation as long as Metsger, who voted along with Matz, is the other vote on a 2-person board. But by getting the delay to 2020, we can assume that Rodney Hood will supply a 2nd vote sometime during 2019 to eliminate the final rule, regardless of Metsger’s disposition as an expired board member or if his eventual replacement has been appointed. Metsger, as a consolation, can continue to say that for as long as he held office, he was a supporter of RBC and excessive agency overreach in the name of “protecting the NCUSIF.”
Got to love politics… The pendulum between rules and tools swings back and forth based more on who has the last word than what is right. Always being last to the party on these kinds of things is a good bet. Picture all the effort and money that has been wasted in debating RBC, CECL, and other regulatory divides in the last 5 years.
How many real issues might have moved forward if we had not stalled so many people in debating the “what if’s” of fluff, risk management overreach, and style points for politicians? Imagine all the CU leaders that were discouraged by the doomsday preached when the predictions of these changes doomed all small CUs. And most of the debate was over late to the party, overreactions to disasters already survived, and the idea that data and measurements can predict the unpredictable, low probability events called life.
My advice: live by the creed of “do valuable things and good things will happen” as CU leaders. Let’s find a way to never be herded into a corner again by those who garner our attention over shuffling paper, debate the inconsequential, and doom us with protection from “it could have been worse” insurance policies.