By way of explanation, two key statutory requirements guided the proposal:
First, section 1790d(b)(1)(a) of the Act requires the NCUA's prompt corrective action requirements to be comparable with those of the other federal banking agencies. The NCUA used the FDIC's capital rule, which is based on Basel III and was finalized in July 2013, as a baseline. However, the NCUA is proposing to adapt capital standards that account for credit unions' assets and risk profiles.
Second, section §1790d(d)(2) of the Act requires the NCUA's risk-based requirement to account for all material risks. Thus, while Basel and the FDIC's rule focus primarily on credit risk, the NCUA's proposed rule factors in interest rate and concentration risk.
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