CUNA letter outlines risk-based capital concerns

CUNA Monday sent a letter to the House subcommittee on Financial Institutions and Consumer Credit regarding the subcommittee’s hearing upcoming on, “Examining Capital Regimes for Financial Institutions.”

In the letter CUNA suggested there are two steps Congress should consider with respect to credit unions’ capital regime: delaying the implementation of the NCUA’s recently finalized risk-based capital rule and enacting legislation that permit all credit unions to issue supplemental capital instruments.

“Credit unions are subject to statutory and regulatory capital requirements, including Tier I leverage ratio that is hardwired into statute and a risk-based capital requirement,” the letter reads.

“These requirements differ from requirements on for-profit financial institutions in recognition of the structural dissimilarities between credit unions and banks,” the letter adds. “Nevertheless, capital is king for all financial institutions and it is essential that credit unions’ capital regime is modernized to ensure credit unions remain safe and sound, and can grow to serve their members and communities.”

 

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