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Matz Considers Revisions to Risk-Based Capital Proposal
Wednesday, June 25, 2014 6:45 AM

On June 19, NCUA Chair Debbie Matz met with CUNA staff about the NCUA’s Risk-Based Capital Proposal. According to Matz, the agency has had many in-house discussions about the issues CUNA raised in their detailed comment letter of May 28, and that NCUA realizes that there are significantly fewer credit unions that need to hold more capital while the stable credit unions can manage their risks and cover losses.

CUNA Interim President/CEO Bill Hampel says he's encouraged that NCUA is reconsidering revisions to the proposal. He stressed that credit unions believe it could cause more damage than good, especially in light of the current financial crisis.

Below are the fundamental modifications CUNA pointed out in their comment letter to NCUA.

  • Lower the RBC requirement for a credit union to be well-capitalized so that it is no higher than the RBC requirement to be adequately capitalized;
  • Retain the 1% NCUSIF deposit in the calculation of RBC;
  • Address the provision that would authorize NCUA to impose additional minimum capital beyond what the rule requires;
  • Revise key risk weightings, particularly in the areas of member business loans, mortgages, mortgage servicing, and CUSO investments;
  • Develop a more complete definition of "complex" credit unions so that fewer credit unions will be covered by the rule; and
  • Provide ample time for credit unions to comply with a RBC final rule.

CUNA plans to follow up with NCUA over the next few months on the RBC proposal. Though the official comment period ended May 28, NCUA is holding three public Listening Sessions, the first on June 26 in Las Vegas.