Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

Washington
CUNA What Basel III could mean to CUs
WASHINGTON (9/14/10)--As global bank regulators, including those in the U.S., reached a Basel III agreement over the weekend on broad reforms that will make banks hold more capital as a buffer against future financial shocks, credit unions may wonder how the accord’s ripples may affect them. The international bank rules, which create a new leverage ratio for banks with a 7% requirement, of course, do not apply to credit unions. However, as domestic bank regulators begin to discuss these new capital standards for banks, that discussion could provide a new backdrop for and focus on a conversation about alternative capital for credit unions. “The good part is the 7% capital ratio for banks would now be the same as the credit union requirement, and we should be able to use that to support the case for letting credit unions count more than just retained earnings as capital,” said Credit Union National Association (CUNA) Chief Economist Bill Hampel Monday. U.S. credit unions--excluding those with low-income designation--are among the only financial institutions in the world lacking access to capital beyond retained earnings. And fallout from the country’s economic crisis has underscored the importance of investigating alternatives. “In a low-earning environment, retained earnings is a painfully slow way to build needed capital,” Hampel noted. Gaining access to sources of alternative capital would require congressional action, so if the Basel III agreement helps turn federal regulators’ and lawmakers’ attention to the topic of financial institution capital, it might help ramp up the volume of credit union arguments for the need for alternatives, Hampel noted. The National Credit Union Administration issued a supplemental capital white paper in April that outlined three models for alternative capital: voluntary patronage capital, mandatory membership capital, and subordinated debt. Use the resource link for more information.
Other Resources

RSS





print
News Now LiveWire
Kids learn budgeting with M&Ms http://t.co/SzXipTLX12
21 minutes ago
Neb. #creditunions report widespread growth: 3Q review #NewsNow #system http://t.co/BavEljz15w
1 hours ago
Economic growth leaps in Nov, @ChicagoFed reports http://t.co/8Xo9lKLFf2
1 hours ago
#NewsNow Redwood CU branch manager will do double duty as mayor http://t.co/yRnkcQYrEG
2 hours ago
.@PCUA PAC donors notch record $151K+, surpassing 2013 total
2 hours ago