WASHINGTON (5/14/14)--Credit Union National Association President/CEO Bill Cheney said Tuesday that the hundreds of House members' signatures collected on a letter of concern over the National Credit Union Administration's proposed risk-based capital (RBC) regulation--and the short timeframe in which they were collected--could never have been accomplished without the outstanding efforts of credit unions and their state leagues.
As reported Tuesday in News Now
, a bipartisan collection of more than 320 House lawmakers joined Reps. Peter King (R-N.Y.) and Gregory Meeks (D-N.Y.) to urge the NCUA to ensure its RBC proposal does not adversely affect small businesses and credit union members.
"Reps. King and Meeks did an outstanding job of reaching out to their colleagues regarding the letter, but a number of members contacted them directly about the letter because of the concerns they heard from the credit unions in their district and their state league," Cheney said of the process behind credit union support of Meeks' and King's letter-writing effort.
"CUNA, our member credit unions and their state leagues and associations thank the members of the House for speaking out on this key issue for credit unions--and we pledge to work with lawmakers to see that their concerns are addressed," Cheney said Tuesday when announcing the lawmakers' success.
At issue is the NCUA proposal that would impose on credit unions with greater than $50 million in assets new standards that would restructure the agency's current "prompt corrective action" regulation to involve calculation of a capital-to-risk-assets ratio, analogous to Basel III for community banks--although the risk weights would be substantially different for credit unions.
The NCUA proposal would change risk-based capital ratios and require higher minimum levels for credit unions with concentrations of assets in real estate loans, member business loans, or high levels of delinquent loans.
The letter encourages 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.
For more on the RBC proposal and on the lawmakers' letter, use the resource links.
"It is almost unprecedented for a letter to generate this much bipartisan support in such a short period of time," said Ryan Donovan, CUNA's senior vice president of legislative affairs said of the massive two-week effort.
"At time when it is difficult to get Congress to agree on much of anything, more than 320 members speaking in one voice sends a message to NCUA that should be loud and clear."
Comments on the RBC plan are due to the agency by May 28. The agency has received about 350 comment letters to date.