WASHINGTON — The two national credit union trade associations supported flexibility in the application of capital standards for banks in comment letters to the Federal Reserve last week.

CUNA Chief Economist Bill Hampel noted that credit unions do not currently have a risk-based capital system like Basel but a provision for this is in the works. He acknowledged that many credit unions have simple balance sheets and that many smaller banks are similarly situated. "To address this, we support allowing institutions to choose between the current Basel I standard and the standard under the new Basel IA that are very similar to those contained in the [notice of proposed rulemaking]," he wrote.

Hampel also asked for improved risk evaluation of mortgages, taking into account credit scores and the seasoning of a loan; small business loans; and business loans secured by non-residential real estate. He also encouraged the agencies to allow institutions to opt for risk-weights under 100% on consumer loans based on credit scores and loan-to-value.