NCUA issues complex CU leverage ratio proposal for RBC compliance

NCUA issued a proposal on a complex credit union leverage ratio (CCULR) at its July 22 board meeting. CUNA supports the option for a CCULR when complying with NCUA’s risk-based capital rule, which was one of two options issued by the agency earlier this year as part of its review of the risk-based capital rule.

“We look forward to reviewing the proposal and are hopeful the CCULR will allow credit unions flexibility when complying with the risk-based capital rule, though we continue to believe the rule itself is functionally unnecessary,” said CUNA President/CEO Jim Nussle. “We support minimizing the compliance burden for credit unions that would otherwise be required to comply with the 2015 rule, and we look forward to submitting more detailed feedback to the NCUA in our comments.”

Credit unions that meet certain criteria will be eligible to opt into the CCULR framework. The minimum net worth ratio would initially be established at 9% on Jan. 1, 2022, and be gradually increased to 10% by January 1, 2024.

A complex credit union that opts into the CCULR framework would not be required to calculate a risk-based capital ratio under the Oct. 29, 2015, risk-based capital final rule. A qualifying complex credit union that opts into the CCULR framework and that maintains the minimum net worth ratio would be considered to be well capitalized.


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