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At its January Board Meeting on Thursday, January 15, the National Credit Union Administration (NCUA) released its revised Risk-Based Capital (RBC) Proposal. Although more in-depth analysis is still ongoing, initial reaction is that the revised proposal represents "a significant and positive step in the right direction."
In a statement to your League, CUNA President/CEO Jim Nussle commented, "I appreciate that the NCUA board reissued its risk-based capital proposal with many of the improvements that CUNA and the leagues requested. We are encouraged that the board listened and responded to credit union concerns, including lowering the 10.5% well-capitalized requirement, lowering some of the risk weights, removing the treatment of interest rate risk, extending the implementation time frame, reducing the number of credit union affected, and addressing the individual minimum capital requirement. CUNA's efforts have helped NCUA make progress, but we remain unconvinced that this risk-based capital approach is even necessary, and are concerned about the risk-based well capitalized requirement and the substantial cost the proposal will impose on credit unions. We will continue to be fully engaged with the NCUA board and the credit union system to enhance the revised rule."
Your League's President John Murphy was also encouraged by the changes and revisions proposed but said, "Feedback from credit unions will again be an important part of the process, and help to determine the final rule. As we did when NCUA issued the first RBC Proposal last spring, your League anticipates setting up a survey soliciting comments from credit unions, and developing those responses into comment letters for each credit union to submit." Last spring, more than two-thirds of Maine's credit unions responded with comments, and your League compiled letters for credit unions to submit. "Voicing our concerns and support is an important part of this process, as was evidenced with the initial proposal and the NCUA's decision to release a revised proposal," added Murphy.
Click on any of the documents or links below for additional information:
Risk-Based Capital Proposal Comparison (Previous proposal vs. New proposal)
CUNA's Risk-Based Capital Website