Chatfield Encouraged Alternative Capital Still in Play

RANCHO CUCAMONGA, Calif.-California Credit Union League President and CEO David Chatfield said he was encouraged that the Government Accountability Office report on alternative capital for credit unions did not entirely rule out the possibility. He added that it was not sufficiently based on the views of individual credit unions. “We appreciate the thoroughness of this week’s GAO report, and the GAO’s acknowledgment that credit unions have maintained capital levels above those they must have to be considered well-capitalized under the law,” Chatfield said. “We’re also glad that, although the GAO believes that the time is not right yet for supplemental capital or risk-based capital requirements, it did not oppose these ideas in principle. “However,” he added, “we wish that, throughout its analysis, the GAO had considered the issue of capital more from the perspective of individual credit unions, rather than from the external vantage point of the credit union movement as a whole.” Chatfield said a micro-view of the capital situation at a number of credit unions during the “flight to safety” over the past three years and credit unions’ growth might have provided a better picture of some credit unions’ situations. “Those observations are true, but the GAO report uses them to base credit unions’ need for capital upon a view of credit unions in the aggregate, from a macro perspective,” he explained. “The report tends to downplay the effect that PCA regulations have on individual credit union business decisions.”