BISMARCK, ND (May 23, 2014) -- Credit unions in the Dakotas are very concerned about the negative impact the proposed Risk Based Capital (RBC) rule would have on credit unions. Nearly half of the credit unions in the Dakotas over $50m in assets are exempt from the MBL cap because they have historically been agricultural lenders, and many others are low income designated credit unions. As such, the proposed rule has a disproportionately deleterious impact on them. Nearly all credit unions in the Dakotas have already submitted or are preparing comment letters, and in addition, the Credit Union Association of the Dakotas is using all available resources to ensure that NCUA is hearing the concerns of these rural and agricultural based credit unions.
One of CUADs efforts is the first (ever) video comment letter addressed to NCUA from several Dakota credit union CEOs. This unique video was created to stress the message that the proposed rule to amend prompt correction action - risk based capital - will have a devastating effect on credit unions in North and South Dakota, especially those that have been providing agricultural lending to their members for generations. This video provides the NCUA not only comments from some of the affected credit unions, but also provides visual evidence. "We want to do everything we can to ensure that NCUA hears and sees the impact this rule could have in rural America, especially in high agricultural area like those so many our credit unions serve" says Robbie Thompson, CUAD President/CEO.
Maintaining access to credit and having multiple lending options is important to rural communities and farmers. Yet, often the options are limited. Many times, it is just a credit union and one other lender. If credit unions were forced to curtail or stop lending in these areas because of the oppressive NCUA proposed RBC rule, these communities and their residents would suffer. That is why CUAD felt compelled to reach out to those agricultural groups to ensure that they have an understanding of the detrimental impact these proposed changes could have. CUAD shared the proposed rule and expressed our concerns, and the rural and agricultural organizations agreed. As a result, these groups, including: ND Corn Growers Association; ND Farm Bureau; ND Farmers Union; Red River Valley Sugarbeet Growers Association; and National Farmers Union came together and jointly signed a comment letter to the NCUA encouraging them to consider rural communities and how this rule could impact lending in those communities when they finalize this rule.
Elected officials from North and South Dakota have also supported efforts to ensure that any NCUA proposed final rule does not negatively affect our rural Dakota communities. House members Kristie Noem (R-SD) and Congressman Kevin Cramer (R-ND) have both signed onto the King-Meeks letter signed by over 300 members of Congress last week. And, on May 22nd, Senator Heidi Heitkamp (D-ND), a member of both the Senate Agriculture and Banking Committees, submitted a letter to NCUA Chairman Debbie Matz. In that letter, Heitkamp asked NCUA to "give important consideration to the practical effect, and possible unintended consequences, this rule may create for agricultural lending."
Headquartered in Bismarck, ND, the Credit Union Association of the Dakotas (CUAD) is the professional financial trade association serving 75 credit unions in North and South Dakota with assets in excess of $5.5 billion and serving over 461,300 credit union members. For more information about CUAD visit our website at www.cuad.coop.