WASHINGTON (3/10/14)--Can the National Credit Union Administration's risk-based capital proposal be fixed? Credit Union National Association experts and credit union CEOs will attempt to answer that and other credit union questions during a just-announced March 19 webinar.
The hourlong CUNA webinar, scheduled to begin at 3 p.m. (CT), will be introduced by CUNA President/CEO Bill Cheney. CUNA Chief Economist Bill Hampel and Deputy General Counsel Mary Dunn will detail the risk-based capital proposal and credit union concerns. Participants will also have the chance to hear directly from credit union CEOs about their perspectives on the proposed rule. A short question-and-answer session is planned to end the information session.
The risk-based capital proposal would restructure NCUA's current prompt corrective action regulation to include calculation of a capital-to-risk-assets ratio, analogous to Basel III for community banks. The risk weights would be substantially different, and the proposal would impose higher capital requirements for credit unions with higher concentrations of assets in real estate loans, member business loans, longer term investments and some other assets.
The proposal would apply to credit unions with assets of more than $50 million.
A final version of the rule is not likely to go into effect until 2016 or later. However, CUNA is encouraging credit unions to consider the proposal and its impact on their operations right now and submit their comments to the agency, CUNA and state leagues. Credit unions will also have a chance to take their thoughts on the issue directly to the NCUA during a trio of public town hall meetings this summer.
CUNA has posted a comprehensive, but concise, summary of the rule to help inform credit unions on the rule, and has also produced a Risk-Based Capital Action Center tool to help credit unions file comment letters with the agency. CUNA has also requested that the agency extend the comment deadline for this proposal by at least 90 days.
For more on the webinar and CUNA's other risk-based capital resources, use the links.