Monday, March 23, 2015

Matz's Comment Undermines Integrity of Rulemaking Process

Despite being in the middle of the risk-based capital proposal comment period, National Credit Union Administration (NCUA) Chairman Debbie Matz announced on March 9 that the agency will issue later this year a proposal to count supplemental capital in full in its risk-based capital numerator.

This announcement seems to undermine the rulemaking process.

NCUA put out for a 90 day comment period its proposed rule with comments due by April 27.

As part of the risk-based capital proposal, the NCUA Board requested comments to several questions about supplemental capital, including "[s]hould additional supplemental forms of capital be included in the risk-based capital ratio numerator and how would including such capital protect the NCUSIF from losses?"

It appears that the agency has already made up its mind on this topic. It will count supplemental capital as part of the risk-based capital ratio numerator.

So much for seeking input from the public on this issue. This agency is making a mockery of rulemaking process.

The agency should have remained silent on this issue until the comment period ended.

Read the proposed rule.

Read Matz's speech.


  1. Do you have the same thoughts about the CFPB Director and his comments about "proposed" regulations? He telegraphs his opinions before a regulation is submitted to the public for comment.

  2. You bring up a good point that also serves as further illustration of the credit union sandbox of children, playing make believe in financial services.
    Credit union "experts", guardians, trade associations and regulator boasted of the cu difference as reason for no need for risk based capital only to find its inevitable...
    While NCUA board members and trades play dueling law opinions...
    While credit unions send 2000 comment letters for rbc1 and a smaller number for rbc2 where the majority of all look like an embarrassing version of large bank robosigning...
    While the same "leadership voices" put forth half truths and falsehoods in describing rbc2...
    And those same leadership voices race to the microphone to be "heard" presenting absurd ideas like (Dollar) insurance premiums should be sized based and (Fryzel) "table please" among countless others...
    One can't help but find the irony we at our credit union discuss...that trade associations for all their bluster are an abysmal failure in getting us access to capital a higher MBL cap and relief from FOM restrictions and now, as a way to sell RBC, NCUA has taken up the mantle on all of the trade association failures...while BOTH are guilty of denying the need and hindering a charter change for those that tried and inhibiting the desire by many of us who would trade the tax exemption so that we can leave the cu sandbox of children and move on to adulthood.
    The cu difference as demonstrated by the RBC drama, is a difference of maturity...



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