New NCUA video answers questions about proposed Risk-Based Capital Rule

ALEXANDRIA, VA (April 18, 2014) — Federally insured credit unions with questions about the National Credit Union Administration’s proposed risk-based capital rule have a new resource just a click or two away: a two-part, 20-minute video released today by the agency.

“NCUA’s risk-based capital proposal is complex, but its overall purpose is simple,” NCUA Board Chairman Debbie Matz said. “This proposal has generated a great deal of discussion, and some misinformation, so we are providing the new video during the comment period to explain why a rule is necessary and how it would affect credit unions. We hope this will provide stakeholders with useful information as they evaluate the proposal.”

The free video, available on NCUA’s YouTube channel, will help credit unions understand how and why NCUA’s proposal differs from the Federal Deposit Insurance Corporation’s rule and Basel III. Introduced by Chairman Matz, the video provides an in-depth review of why the rule is needed and how credit unions would fare under both the current risk-based net worth system and the proposed risk-based capital rule.

Parties interested in commenting on NCUA’s proposed risk-based capital rule have until May 28 to submit letters.

The new video is another resource to help federally insured credit unions better understand how the proposed changes to NCUA’s Prompt Corrective Action rule may affect their risk-based capital ratios. NCUA has posted a Risk-Based Capital Calculator on its website during the comment period to help federally insured credit unions determine how the proposed changes may affect their risk-based capital ratios. NCUA’s Office of Examination and Insurance published articles in the April 2013 and May 2013 NCUA Report on demystifying capital requirements for credit unions.

NCUA plans an extended phase-in period for the final risk-based capital rule to allow federally insured credit unions enough time to adjust their risk profiles or capital levels, or both, to ensure compliance with the new regulation.

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 more than 96 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. At and Pocket Cents, NCUA also educates the public on consumer protection and financial literacy issues..

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