WASHINGTON (3/5/08)--National Credit Union Administration (NCUA) Chairman JoAnn Johnson testified Tuesday that federally insured credit unions are well capitalized with net worth at 11.4%, total assets of $753 billion, and aggregate net worth of $86 billion, the highest dollar amount in history. She joined federal and state financial regulators testifying before the Senate Banking Committee on “The State of the Banking Industry”. Johnson also addressed foreclosure mitigation efforts, systemic risk, transparency, and risk management techniques being applied to enhance safety and soundness throughout the credit union industry. “NCUA data collection and financial trend monitoring, extensive examination procedures, and strong mortgage lending and risk management guidance in the form of letters to credit unions have been crucial in ensuring the federally chartered credit union system remains financially strong in the midst of real challenges in the mortgage market,” Johnson told the Senate panel. Johnson stressed that riskier nontraditional loans are not prevalent at federally insured credit unions. She noted that 58% of credit union mortgage loans are fixed rate and only 2.3% are interest-only or optional-payment loans. The chairman of the committee, Rep. Christopher Dodd (D-Conn.), pushed the federal banking regulators on whether new international banking capital standards would be sufficient in the aftermath of the subprime mortgage meltdown. (CongressDailyPM, March 4). The chairman expressed concern that proposed Basel II rules could exacerbate problems, as some analysts have observed, because of a greater emphasis on a bank's internal models to assess risk and determine capital when those institutions might want to seek greater profits by minimizing any risk exposure in their modeling.