CUNA questioned the timing of the NCUA's proposed risk-based capital rule, which is scheduled to be introduced Thursday during the board's regular monthly meeting.
“We do have a lot of concerns about how this might turn out. No one outside of NCUA knows exactly what's going to be in the proposal,” said Mary Dunn, CUNA senior vice president and deputy general counsel, during a Tuesday morning press call.
“We just don't feel the timing is right – never, but particularly now – for gratuitous risk-based net worth requirements,” she added.
Dunn said CUNA will be meeting with Larry Fazio, the NCUA's director of the Office of Examination and Insurance, during the proposed rule's comment period.
The 7% capital standard under the Federal Credit Union Act would remain the floor requirement. Credit unions with more than $50 million in assets could be subject to new requirements in the proposed rule.
“This is a very complicated rule and we want to be sure to get it right. The idea will be to risk rate the capital so credit unions that are holding riskier capital on their books will have to hold higher capital levels,” NCUA Chairman Debbie Matz told Credit Union Times in December.
“It's very complicated. The staff has been working diligently on it and they simply needed more time and we encouraged them to take the time that they need because we want to make sure they do get it right,” Matz added.
Other items on Thursday's board meeting agenda include the derivatives final rule.
“We are hopeful that there are going to be major changes in the final rule,” Dunn said.
The proposed rule would grant investment authority for simple derivatives transactions to federally insured credit unions with more than $250 million in assets.
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