ALEXANDRIA, Va. — NAFCU remains concerned about the NCUA requiring credit unions to hold more capital through the exam process outside of the formal risk-based capital rule, according to Carrie Hunt, NAFCU SVP of government affairs and general counsel.
"In the original proposal, there was a requirement, it was called the individual capital requirement. Under the original proposal, NCUA could make a credit union hold more capital, external to what was required by the rule," Hunt told CU Times after the NCUA Board meeting Thursday.
She added, "It was very unclear under the proposal whether the NCUA examiner would be able to just make the decision or whether it was an NCUA Board issue. So, NCUA went ahead and eliminated that from the proposal."
Hunt said NAFCU is concerned that the NCUA might not have the legal authority to require a credit union to hold additional capital as part of the exam process.
"Now NCUA has indicated they will address any sort of capital adequacy issues during the normal exam process," Hunt said.
Both CUNA President/CEO Jim Nussle and NAFCU President/CEO Dan Berger released a joint statement after the NCUA Board's approval of the second risk-based capital proposal in a 2-1 vote.
"While there have been some much needed improvements to NCUA's revised risk-based capital proposal, we still have many concerns. Based on the healthy capital levels across the credit union industry and the millions of dollars in costs associated with this proposed rule, our respective organizations still have serious issues with it and continue to question the necessity of the proposal," the CEOs said.
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