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RBC2: ‘Stop and Study’ on Capitol Hill and NCUA

Mon, Oct 5, 2015

Columbia, Maryland

Last Wednesday, the House Financial Services Committee, conducted a ‘mark-up’ (the process by which members debate, amend, and rewrite proposed legislation) on a number of bills including H.R. 2769 – Risk-Based Capital Study Act of 2015. The so called “Stop and Study” bill has been the focus of much discussion and debate within the ranks of the industry over the last several months.  The Association, at the direction of the advocacy committee has strongly and consistently supported the bill with the advocacy team conveying our position to our entire Congressional delegation in numerous meetings and other communications since it’s formal introduction in June.  

The final committee vote on “Stop and Study” was 50 -9 to approve, which will potentially move the bill forward to a full House vote as a stand-alone bill or more likely attached to a larger piece of legislation that will be voted on by the full House. While there is a fair chance that the bill will move forward and be voted on (and approved) by the full House, it’s unlikely to gain any traction in the Senate.  However, the mark-up (most bills never make it to even this point in the committee process) and the lop-sided vote of approval has shown that our continued collective efforts have had an effect and members on both sides of the aisle are hearing us. 

To that end, the Association drafted and forwarded a letter addressed to Committee member Rep. John Delaney (D-MD), thanking him for his vote to support the bill.  Rep. Delaney comes from a banking background and while always open to hearing our views has not always been open to supporting our positions.  So it was with considerable appreciation that we viewed his vote to approve the bill in committee. Regardless of the final outcome in the Senate, it’s important that we put down a marker and keep focused on the issue, in recognition that the NCUA is paying attention to what Congress has to say, as the agency did during RBC1.  

H.R. 2769, would require the NCUA to ‘study and report’ to Congress on a number of issues including whether the agency has the legal authority to issue a two-tier proposal, how RBC2 compares to bank capital requirements, the rationale behind the risk-weighting used by the agency and the impact the proposal will have on credit unions’ capital cushions. Not surprisingly, NCUA Chair Debbie Matz sent a letter to the Committee Chair Jeb Hensarling (R-TX) and Ranking Member Maxine Waters (D-CA) prior to the mark-up expressing agency concern and opposition to the bill.

The NCUA’s proposed RBC2 regulations, while much improved from its original proposal continue to cause great concern to members and stakeholders.  In our view, “Stop and Study” is a needed directive to the NCUA to take a pause to review regulations, that when finally put into place will be the most far-reaching set of regulations ever proposed by the agency.  The NCUA Board is expected to vote to finalize the RBC2 rule-making at its Thurs., October 15 Board meeting @ 10:00 am.

In a somewhat related regulatory note, during the same mark-up, the Committee also approved H.R. 957 - Bureau of Consumer Financial Protection-Inspector General Reform Act of 2015 by a vote of 56-3.  The bill would amend the Dodd-Frank Wall Street Reform and Consumer Protection Act to create an Inspector General for the CFPB.  Currently the CFPB’s Inspector General is appointed by the Chairman of the Board of Governors of the Federal Reserve System.  H.R. 957 would establish a CFPB ‘IG’ appointed by the President in the same manner as other independent agency IG’s.

For more information: Glen Cooney, VP, Advocacy & Legislative Affairs, 443-325-0775,