Links in “Risk-Based Capital”

During a Listening Session in Los Angeles, NCUA Chair Debbie Matz, stated that the agency is taking a second look at the proposed risk of certain asset categories, specifically mortgages, business loans, investments, CUSOs and corporates, and will “presumably lower” their risk weightings. Matz also said that they are considering raising the asset threshold limit for determining which credit unions will be exempt from the risk-based capital rule. [6/27/14]

The House Financial Services Committee Chair and a ranking member have sent a letter to NCUA Chair Debbie Matz that echoes concerns from others on the Hill about NCUA’s proposed risk-based capital rule. The letter calls into question NCUA’s methodology for assigning higher risk weights to certain types of assets and expresses concerns about the cost and burden of implementing the changes. [6/23/14]

Following a meeting with NCUA Board member Rick Metsger, CUNA Deputy General Counsel Mary Dunn reported that she believes that Mr. Metsger has an open mind to changes to the proposed risk-based capital rule. CUNA will be meeting with NCUA Chair Debbie Matz later this week in an effort to promote revisions to the rule that would include lowering the RBC component for well-capitalized credit unions; revising the risk weightings for certain assets such as business loans, mortgages, mortgage servicing, and CUSO investments; and eliminating the provision that would allow examiners to set higher minimum capital requirements on an individual credit union basis. [6/19/14]

On his final day as CUNA CEO, Bill Cheney, shares his thoughts about credit union taxation, CUNA’s regulatory and legislative successes during his tenure, and the future of risk-based capital. Cheney is returning to California to become CEO of the $10 billion SchoolsFirst FCU. [6/10/14]

Following on the heels of a letter from House members, Senate Banking Committee leaders have submitted a letter to the NCUA asking the agency to carefully consider any negative impact its proposed risk-based capital rule could have on credit unions’ agricultural lending and their ability to raise and maintain capital. The Senators also urged that the Agency afford sufficient time for credit unions to adapt to any new standards. [6/5]

Chairman of NCUA Debbie Matz responds to Congressman Peter King's letter about NCUA’s proposed rule to modernize the agency’s risk-based capital regulation for federally insured credit unions. Ms. Matz claims that overall, the proposed rule would only apply to federally insured credit unions with assets of $50 million or more—2,200 out of about 6,600. As a result, the 4,400 federally insured credit unions below $50 million in assets—two thirds of all credit unions—are not affected by the proposed rule. [6/2]

In a 47-page comment letter submitted to the NCUA, CUNA identifies serious flaws in the proposed risk-based capital rule and urges that the rule be withdrawn. CUNA states that the rule could cause significant harm to the industry, particularly in light of the fact that the Agency has failed to provide adequate justification for the major changes the rule would require. [5/29]

The National Association of State Credit Union Supervisors (NASCUS) filed comments this morning on the NCUA’s proposed Risk-Based Capital Rule. [5/29]

NCUA has received 1,100 comment letters in response to its risk-based capital rules. Here's what's next. [5/28]

Former House Speaker Newt Gingrich, who worked on amending the Federal Credit Union Act in 1998 says Congress never intended for well-capitalized credit unions to be held to a higher risk-based capital ratio that adequately capitalized credit unions. Under the proposed rule, adequately capitalized credit unions would be required to maintain a minimum risk-based capital ratio of 8.0%, while well-capitalized credit unions would have to maintain a minimum risk-based capital ratio of 10.5. [5/27]