NCUA will propose stress testing reg for $10B-Plus CUs

by. Heather Anderson

NCUA Board Chairman Debbie Matz said Wednesday the regulator is drafting a proposed rule that would require annual stress tests at credit unions with assets exceeding $10 billion.

Matz made the announcement in a speech at the annual NASCUS State System Summit in Coeur D’Alene, Idaho.

The NCUA Board aims to issue the proposed rule for public comment before the end of the year, Matz said.

“At NCUA, we need to utilize all the tools at our disposal to look ahead in order to protect the industry in the future,” the NCUA Board chairman said in her announcement.

“Stress tests are forward-looking measures. They’re designed to determine whether an institution is holding an adequate capital cushion to survive adverse scenarios and to allow credit unions to make adjustments before a crisis hits,” she said.

The Dodd-Frank Act requires certain financial firms with more than $10 billion in assets to conduct annual stress tests. Matz said stress testing is just as important for credit unions of comparable size.

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