I have a confession to make that could end up in eggs on my car windshield or a horse head in my office. After hearing about the NCUA's risk-based capital rule, I was scratching my head to figure out why credit unions were belly aching so much.
On its face, loans should be weighted according to the risk they bring to the institution. I didn't understand why, after spending years griping about the likes of Telesis and CalState 9 and Texans, that credit unions were now complaining that the federal regulator was attempting to get a better read on exactly what was going on inside of credit unions.
My first impression was that credit union executives were whining because it was all of the other credit unions, and not theirs, that were a problem. On its face, risk-based capital is a beneficial concept for everyone, particularly in a cooperative industry.
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