NASCUS Files Comments on NCUA Proposed Risk-Based Capital Rule

May 28, 2014 – Arlington, Va. The National Association of State Credit Union Supervisors (NASCUS) filed comments this morning on the NCUA’s proposed Risk-Based Capital Rule.

NASCUS recognizes designing a risk-based system is a complicated undertaking and that it has been a contentious issue. No doubt NASCUS is not alone in its belief that the proposed rule is too broad. Notably, NASCUS’ comment letter addresses the need for the NCUA to include supplemental capital for non-low income consumer credit unions within its proposed risk-based regulatory framework. That they have not, writes NASCUS in its May 28, 2014, letter, “is unfortunate and disappointing.”

“NCUA’s contention that it lacks the authority to include supplemental capital for the risk-based capital ratio is an unnecessarily narrow reading of the (Federal Credit Union Act),” writes NASCUS. Said NASCUS President and CEO Mary Martha Fortney, “We were disappointed that the NCUA declined to include supplemental capital, as we feel it is within their authority to do so.”

NASCUS believes more consultation with state regulators would resolve many of the issues that the proposed Risk-Based Capital Rule brings. Such dialogue could be especially helpful where the individual minimum capital requirement is concerned. Regulators are successful when they promulgate rules that are nimble enough to address problem credit unions without encumbering the entire industry.

Fortney noted NASCUS’ comments focus on ensuring that the rule is right-sized for the credit union industry, reflect the reasoned judgment of the actual risks, maintain predictable standards that support credit union growth and innovation, and cement the current commitment by NCUA to consult and coordinate with state regulators. 

 “NASCUS remains committed to working with NCUA to ensure any final rule is carefully calibrated to achieve the supervisory goal of improving capital standards without unduly burdening the credit union system,” she added. To read NASCUS’ comment letter in its entirety, please click here.



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