Links in “Risk-Based Capital”

Now that interest rate risk is being removed from the revisions to the proposed RBC rule, NAFCU is urging that NCUA make four other changes: lowering the 10.5% RBC ratio; removing the individual minimum capital requirement and creating an independent appeals process that is free of examiner retaliation; including a consideration of a credit union’s portfolio of assets and liabilities in the definition of a complex credit union; and increasing the 1.25% risk to assets ratio for ALLL purposes. [11/6/14]

While CUNA is pleased that NCUA has decided to remove interest rate risk considerations from the proposed risk-based capital rule, it is concerned about NCUA issuing a separate IRR rule. CUNA CEO Jim Nussle stated that the agency already has rules on the books to address IRR and that another regulation is not necessary. [11/5/14]

NCUA has confirmed that it will be eliminating interest rate risk considerations from the soon-to-be released and revised risk-based capital proposal. A separate rule addressing interest rate risk is expected to be issued in the first half of 2015. [11/4/14]

Several officials at NCUA have commented that the agency is considering removing the consideration of interest rate risk from the risk weights assigned under the proposed risk-based capital rule and issuing a separate IRR rule. This response is based on the deluge of adverse comments from the industry regarding NCUA’s focus on IRR in the RBC proposed rule. [10/31/14]

According to former NCUA Chair Dennis Dollar, NCUA’s decision to issue a revised risk-based capital rule proposal indicates that the agency is indeed going to make significant revisions to the current proposed rule and that it was the right move to help ensure that the final rule addresses the safety and soundness concerns of both the industry and the regulator. [10/2/14]

Although she was once adamant that the proposed risk-based capital rule did not need a second comment period, NCUA Board Chairman Debbie Matz says she "now believe[s] it is prudent under the APA to ask for additional comments." [9/30/14]

The NCUA has proposed that the revised risk-based capital rule be allowed to a new comment period due to its significant revisions. [9/30/14]

NCUA Chair Debbie Matz, in response to a letter from Rep. George Holding, said that she is "fully committed to making changes and clarifications to the proposed rule, where warranted." Holding also questioned the NCUA's authority to make such a rule; others are vying for a second comment period. Where do you stand? [9/26/14]

Fed Governor Daniel Turullo is expected to tell lawmakers today that risk-based capital standards for banks in the U.S. will be tougher than the Basel requirements imposed on their European counterparts. [9/9/14]

Due to the significant amount of concern expressed by Congress on NCUA’s proposed risk-based capital rule, NCUA will want to tread carefully in crafting the final rule, according to Carrie Hunt, General Counsel for NAFCU. If the final rule does not satisfactorily address the issues raised by members of the House and Senate, the end result could be legislation that could affect the degree of flexibility the agency has in the future. [8/14/14]