Thank you Congressman McHenry

by State of Mind

by. Henry Meier

Republican Congressman Patrick McHenry’s asking questions that NCUA should have answered a long time ago in advocating for risk-based capital reform. According to our good friends at CUNA, the Republican Congressmen is asking NCUA to inform him of:

  • Any cost-benefit analyses performed by the NCUA or that otherwise form part of the administrative record in this matter;
  • The metrics used to determine what asset classifications required revisions;
  • A justification for the revised weighing associated with each individual asset class; and
  • An explanation of the extent to which NCUA examiners would be empowered to assess and make capital recommendations to credit unions that might deviate from the new RBC standards.

NCUA keeps on saying it is committed to a transparent rulemaking process when it comes to RBC reform but, aside from making the impact of the proposal on credit unions publicly available on its website, the proposal has been short on specific explanations about how NCUA settled on the specifics. When a rule of this importance is proposed, it is typically accompanied by a section by section analysis explaining in detail why an agency is proposing the specific change. I know everyone likes to bash the CFPB, but they do such a thorough job of explaining what it is they want to do and why that you know a tremendous amount of thought was put into any one of its proposals.

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