NCUA debuts risk-based capital calculator
ALEXANDRIA, VA (January 24, 2014) — The National Credit Union Administration has created an innovative online tool to help federally insured credit unions better understand how the proposed changes to the Prompt Corrective Action rule may affect their risk-based capital ratios.
The new Risk-based Capital Calculator is available at http://rbnw.ncua.gov.
The Risk-based Capital Calculator provides users a comprehensive overview of a credit union’s capital ratio and Prompt Corrective Action category under both the current rule and the proposed regulation. Although the new risk-based capital ratio measure will apply only to credit unions with assets of more than $50 million, the calculation is available to all federally insured credit unions. Users can search for a specific credit union by name or by charter number.
After selecting a credit union to review, users can see each component of that particular credit union’s risk-based capital ratio. Users also can click on the “formula” icon located by each individual component to see what data from the Call Report are used and how the proposed risk-weights are applied at each point in the ratio calculation. This level of transparency will ultimately lead to a better final rule.
Credit unions of all asset sizes are encouraged to utilize the calculator during their review of the proposed changes for calculating risk-based capital. To help credit unions use the calculator, a new instructional video is available here.
The NCUA Board approved the proposed Capital Adequacy Rule for a 90-day comment period at today’s meeting. The proposed rule is available for review here.
For any technical questions about the proposed Capital Adequacy Rule or the Risk-based Capital Calculator, interested parties may contact NCUA’s Office of Examination and Insurance by email at EImail@ncua.gov.
NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions. With the backing of the full faith and credit of the U.S. Government, NCUA operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of nearly 96 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions.