July 16, 2014
The Honorable Ed Royce
U.S. House of Representatives
2185 Rayburn House Office Building
Washington, D.C. 20515
Dear Chairman Royce:
On behalf of the National Association of Federal Credit Unions, the only credit union trade association exclusively representing the interests of our nation’s federal credit unions, I write today to thank you for raising the issue of the National Credit Union Administration’s (NCUA) proposed risk-based capital rule for credit unions at yesterday’s Subcommittee on Financial Institutions and Consumer Credit hearing on regulatory relief. In response to your question, we want to share with you language (attached) that would require NCUA to “stop and study” this issue further and report back to Congress before proceeding.
This approach would help ensure that the agency, credit unions, Congress and others fully understand and comprehend the impacts of this proposal before moving forward. Furthermore, the additional time provided by the study could help ensure that things are done right in any final proposal. As we testified at the hearing, we would urge the Committee to move forward with this approach, either as a stand-alone bill, or packaged as an amendment to other legislation. We would welcome the opportunity to work with you in this regard.
In addition to the “stop and study” approach, NAFCU also supports broader capital reform for credit unions as outlined in our Five-Point Plan for credit union regulatory relief that was highlighted in our testimony. This includes improvements to prompt corrective action standards to help foster an effective risk-based capital regime for credit unions and authorizing NCUA to allow all credit unions to have access to supplemental forms of capital.
Thank you again for your leadership on this issue and your support of credit unions. If I or my staff can be of assistance to you, please do not hesitate to contact myself or NAFCU’s Vice President of Legislative Affairs, Brad Thaler, at (703) 842-2204.
Sincerely,
B. Dan Berger
cc: Members of the House Financial Services Committee