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Nussle Says RBC2 is a Solution in Search of a Problem
Monday, April 20, 2015 6:45 AM

CUNA submitted its comment letter Friday on the National Credit union Administration's revised risk-based capital plan (RBC2). While holding firm to the view that the rule is unnecessary and should be tabled, the letter offers a number of constructive suggestions to improve the rule since the agency appears determined to move forward.

"I've said it before. I will keep saying this. A risk-based capital rule is a solution in search of a problem. What's more, the current plan—though vastly improved from the original—is a solution that just won't work in search of a problem that just does not exist," CUNA President/CEO Jim Nussle said.

Nussle said more than 1,200 credit unions have already filed a comment letter, and the NCUA needs to hear from other stakeholders as well.

At Cornerstone's recent Annual Meeting, NCUA Board Member Mark McWatters emphasized that the solution to regulatory relief has to involve credit unions, and he stressed how important it is for credit unions to write and tell him what they think about the new proposals. "Submit a formal comment letter," he said. "The best thing that works with NCUA is to not be passive, but to say what resonates in your own words."

Cornerstone Chief Member Service Officer/EVP and CFO Karen Hart agrees. "The most valuable asset we have as a League is our members' engagement with local and federal regulators," Hart said. "I encourage all credit unions to let NCUA hear your thoughts. Together we can make difference."

CUNA has created a body of resources to support credit unions' RBC letter writing and has produced a video describing the key points of its 15-page comment letter.

Among the points made in the trade association's letter, Nussle emphasizes that the proposal, as well as other recent NCUA initiatives, goes way too far in treating credit unions like banks; it ignores the importance of the credit union difference as cooperative, not-for-profit, member-owned and directed institutions.

"There is a real danger," he warns, "that if you are regulated and supervised as banks, you will be forced to act more like banks, which would be a great disservice to your members."

Review the top points made in the CUNA letter.