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Risk-based capital rule would affect fewer than 200 CUs, Metsger says
WASHINGTON (1/14/14)--As the National Credit Union Administration works to modernize the 15-year-old credit union capital regime, board member Rick Metsger said Monday night that fewer than 200 credit unions would be required to make adjustments under a new risk-based capital proposal now being developed.
 
Speaking before the Metropolitan Credit Union Management Association (MACUMA), an organization of credit unions in the Washington, D.C. area, Metsger said the agency is working "very, very hard" on the proposal, though he gave no timetable for when the proposal would be released by the agency. The NCUA will post an agenda Thursday for its January open board meeting.
 
The current 7% leverage capital standard was set by statute in 1998. While only the U.S. Congress could change the statute, NCUA Chairman Debbie Matz said in July that the recent financial crisis and industry changes mean the agency must implement the law with a newer, more flexible, forward-looking approach.
 
The Credit Union National Association has supported net worth standard changes that reflect risk better than the present approach but that will not simply add net worth requirements to the current system. CUNA has also been urging the agency to adopt a more productive approach to rulemaking that focuses on problem areas rather than issuing rules with blanket applicability, regardless of the credit unions level of risk. CUNA's Examination and Supervision Subcommittee has met with NCUA officials on the capital ratio issue.
 
In other comments last night, with regard to cybersecurity, Metsger said that in the wake of the massive Target breach, "it is time to move to a safer system" for securing data, including to EMV, or chip-based, systems.

"You can see a changeover to EMV is going to be an expedited process," he said, with serious consideration by all participants in the payment system in the next 24 months.


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