CUNA notes risk-based rule concerns ahead of today’s NCUA meeting

The Credit Union National Association remains concerned about a proposed rule on risk-based capital that is on the agenda for today’s National Credit Union Administration open board meeting. “This is not the time for gratuitous regulations,” CUNA Deputy General Counsel Mary Dunn said ahead of today’s meeting.

The current 7% leverage capital standard was set by statute in 1998, and it would take an act of the U.S. Congress to change the statute. However, NCUA Chairman Debbie Matz said in July that the recent financial crisis and industry changes has sparked an agency interest in implementing the law with a newer, more flexible, forward-looking approach.

NCUA board member Rick Metsger earlier this month said the pending risk-based capital proposal would impact fewer than 200 credit unions, but CUNA warns this low number does not alleviate concerns with the approach.

CUNA supports net worth-standard changes that reflect risk better than the present approach, but ones that will not simply add net worth requirements to the current system.

CUNA has also been urging the agency to adopt a more productive approach to rulemaking that focuses on problem areas rather than issuing rules with blanket applicability, regardless of the credit unions level of risk. CUNA’s Examination and Supervision Subcommittee has met with NCUA officials on the capital ratio issue.

continue reading »

More News