Stress-Testing Rule Reduces Burdens, Allows Credit Unions to Conduct Tests

April 2018
Stress-Testing Rule Reduces Burdens, Allows Credit Unions to Conduct Tests

Board Action Bulletin

Advertising Rule Gives Credit Unions New Options on Advertising

ALEXANDRIA, Va. (April 19, 2018) – The National Credit Union Administration Board held its fourth open meeting of 2018 at the agency’s headquarters today and unanimously approved two items:

  • A final rule reducing regulatory burdens on federally insured credit unions with assets of $10 billion or greater by removing certain current capital planning and stress testing requirements.
  • A final rule revising parts of the agency’s advertising rule to provide regulatory relief by allowing an additional advertising option, expanding exemptions, and eliminating one requirement.

Final Stress-Testing Rule Tailors Requirements to Covered Credit Unions’ Size

The NCUA’s capital planning and stress testing requirements would provide a measure of regulatory relief under a final rule (Part 702) approved by the Board.

The NCUA Board rule requiring capital planning and stress testing for federally insured credit unions with assets of $10 billion or greater anticipated the possibility of covered credit unions being allowed to conduct stress tests once the NCUA had completed three stress tests. The Board approved a proposed rule making changes at its October 2017 open meeting.

Under the final rule approved today, credit unions with assets of less than $20 billion will continue to develop annual capital plans, but those plans will no longer be submitted to the NCUA each year by May 31. Credit unions with assets greater than $20 billion will continue to submit plans that must be approved by the agency.

Under the final rule, the NCUA will no longer be required to conduct supervisory stress tests. Credit unions subject to the rule will conduct stress testing themselves. NCUA has reserved the right to conduct stress tests on covered credit unions if it deems such action necessary.

Credit unions with assets of less than $15 billion will no longer be subject to stress-testing requirements. Credit unions with assets greater than $15 billion will be required to conduct stress testing, though credit unions with assets greater than $20 billion will be subject to a 5 percent minimum stress test capital ratio.

The final rule, available online here, will become effective June 1, 2018.

Rule Provides Options when using NCUA’s Official Advertising Statement

Credit unions will gain an added measure of flexibility and regulatory relief in complying with the NCUA’s advertising rule under a final amending rule (Part 740) approved by the Board.

The advertising rule had required federally insured credit unions to use one of three versions of the NCUA’s official statement in all advertising. Today’s approved rule adds a fourth version, allowing a credit union to state “insured by NCUA.” To provide additional regulatory relief, the Board is expanding a current exemption from the advertising statement requirement regarding radio and television advertisements and eliminating the requirement to include the official advertising statement on statements of condition required to be published by law.

The final rule, available online here, will become effective 30 days after publication in the Federal Register.

The NCUA tweets all open Board meetings live. Follow @TheNCUA on Twitter, and access Board Action Memorandums and NCUA rule changes at www.ncua.gov. The NCUA also live streams, archives and posts videos of open Board meetings online.

Last modified on
11/30/18