WASHINGTON — NCUA Board Chairman tried to advance the idea of risk based capital reform for credit unions during a Mar. 4 hearing before the Senate Committee on Banking, Housing and Urban Development.

The Committee had called the hearing to inquire into the health of the U.S. Banking industry during the current difficulties in the credit, housing and mortgage events.

Johnson's 24 pages of prepared comments for the hearing sought to walk the narrow line between acknowledging the rough economic environment in which credit unions find themselves and reassuring the Committee about their safety and soundness.

But once her prepared comments were done, the rest of the hearing's questions centered on issues surrounding banks and bankers and carried little relevance for credit unions. Senators expressed concern about a wide variety of questions, including the implementation of capital standards and whether the new BASEL II capital regulation system, which is gradually being implemented in this country but which is more advanced in Europe, would have helped or hurt banks struggling through the current economic situation.

Johnson's risk based capital answer came when she asserted herself in response to a general question about those BASEL II capital standards.

“I'd like to answer that,” Johnson said, stepping into a question from Committee Chairman Christopher Dodd (D-Conn.) on Basel II which appeared headed to Comptroller of the Currency John Dugan. “While credit unions don't fall under Basel, we do have a risk based capital proposal on the table for Congress to take a look at. I would ask your serious consideration. This would give us a real tool as a regulator to identify problems more quickly and it would help credit unions manage their risk more effectively. And it's our risk based capital prompt corrective action proposal that we have been working three years on it and I would ask your consideration.”

Chairman Dodd made no response and the conversation stayed firmly fixed on bank issues for the rest of the hearing.