WASHINGTON (3/3/14)--The 90 days given for public comment on the National Credit Union Administration's (NCUA) controversial risk-based capital plan is not enough and should be at least doubled, the Credit Union National Association and the National Association of Federal Credit Unions told the regulator in letter sent Friday.
The current comment deadline is May 28. A 90-day extension would give credit unions until Aug. 26 to submit their comments on the proposal.
"The risk-based capital is the most significant proposed rulemaking that credit unions will face this year and likely for years to come," the joint letter declared. "Such an extension of the comment period will allow credit unions much needed additional time to review the provisions in the proposal in detail and analyze thoroughly the impact of such provisions on their current operations and plans for the future."
The extension would also allow the agency to include the comments, data and recommendations received at this summer's scheduled NCUA listening sessions to be considered and included in the administrative record.
CUNA has produced a video segment with tips on how to write effective comment letters on the proposal, and has also launched the Risk-Based Capital Action Center, which will allow CUNA members to directly write NCUA in a quick and efficient way and submit their comments electronically with the click of a mouse.
The 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.
CUNA estimates that the rule, if made final and implemented, would lead to credit unions needing to hold as much as $7.3 billion in additional capital.
For the CUNA comment tool and more on the proposed rule, use the resource link.