WASHINGTON (4/24/14)--The Credit Union National Association and the Credit Union Association of New York thanked House Financial Services Committee members Peter King (R-N.Y.) and Gregory Meeks (D-N.Y.) for their concern expressed regarding the across-the-board approach set forth in a recent risk-based capital proposal.
Such an approach, currently being considered by the National Credit Union Administration, "would be burdensome for credit unions, expensive (potentially drawing up to $7 billion in credit union capital out of the economy), and likely impose on credit union members higher loan rates and service fees, and diminish members' return on savings," CUNA President/CEO Bill Cheney and CUANY CEO William Mellin wrote.
King and Meeks last week took their concerns to the NCUA and asked their House colleagues to join in the fight to amend the RBC rule in a letter to the agency. (See April 21 News Now
: Lawmakers seek colleagues' backing on RBC plan changes.)
The legislators' letter encouraged the NCUA to:
Take into account the cost and burden of implementing new risk-based capital requirements beyond the current leverage ratio;
Provide justification and more clarity as to why the proposed risk weights differ from those applied to other community financial institutions; and
Give credit unions more time than the proposal's allotted 18 months to come into compliance after it is finalized.
"We strongly support your shared view, as expressed in your letter to [NCUA] Chairman Matz, that certain changes and clarifications be made to ensure that a rule does not unduly burden credit unions, and does not adversely affect healthy credit unions' ability to meet the needs of their members," Cheney and Mellin said.