Links in “Risk-Based Capital”

In a report released yesterday, NCUA Chair Debbie Matz stated that the final rule on risk-based capital may be changed to allow for a phase-in period longer than the proposed 18-month time frame. [5/21]

More than 550 credit unions and credit union advocates have flooded the NCUA's website with letters and more than 320 members of the US House signed a letter addressed to the NCUA. What are they concerned about? The proposed risk-based capital rule, of course. [5/19]

Three NCUA representatives explain the reasons for updating the risk-based capital rule in a YouTube video. [5/19]

According to Chip Filson of Callahan & Associates, the answer is yes.  This op ed piece dissects the requirements of a risk-based approach to determining appropriate capital levels and concludes that credit unions are more nuanced than a single risk formula and that applying a single, formulaic approach will distort fundamental business practices. [5/16]

A NAFCU-sponsored letter with the signatures of 324 members of Congress has been sent to NCUA Chair Debbie Matz. The letter, which calls for more clarity about why the proposed risk ratings for credit unions is different from those set for other types of financial institutions, urges NCUA to consider the cost burden of the proposed rule and how that burden might affect mortgage and business lending. The letter also calls on the Agency to extend the comment period beyond 90 days. [5/16]

NCUA Board member Michael Fryzel has sent a letter to both CUNA and NAFCU in which he states that he believes the full NCUA board should vote on whether to extend the comment period for the proposed risk-based capital rule.  However, he added that he was confident that the final rule would include the suggested changes recommended by the two trade associations. [5/15]

Jim Blaine, outspoken CEO of State Employees’ Credit Union in Raleigh, NC, says that he may recommend that his board consider converting to a bank if certain aspects of the proposed risk-based capital rule are not changed.  Blaine states that the proposed rule gives an unfair advantage to banks and the result could be that the credit union might be able to better serve its members through a bank charter. [5/12]

In a letter to CUNA, NCUA Board member Rick Metsger echoed the decision of Debbie Matz that there will be no extension of the comment period of the proposed Risk-Based Capital rule. Metsger stated that he feels there is sufficient time remaining in the comment period, which ends on May 28^th, for all interested parties to submit their comments. [5/2]

NCUA Chair Debbie Matz has said “no” to the joint request from CUNA and NAFCU to extend the comment period for the proposed risk-based capital rule for an additional 90 days stating that the proposed rule has been available to credit unions since January and that is sufficient time for credit unions to review the rule and to formulate their comments. The other two board members have yet to respond to the request for the extension. [4/25]

CUNA’s Subcommittee on Examination and Supervision met yesterday with NCUA’s Director of Examination and Insurance Larry Fazio and Deputy Director Tim Segerson. The subcommittee pressed the NCUA officials with their concerns about the adverse effect the proposed rule will have on credit unions’ capital cushion and on the agency’s proposed authority to impose additional capital requirements on individual credit unions on a case-by-case basis. [4/22]