WASHINGTON–Following today’s vote by NCUA in favor of new risk-based capital rules, CUNA issued a statement calling the plan a “solution in search of a problem.”
The trade group also took credit for “significantly impact(ing)” the final risk-based capital rule by advocating for removal of the capital adequacy provisions, for the reduction in a number of the risk weights, and for additional explanation of the conditions under which goodwill could be included in the risk-based capital ratio.
“Make no mistake – CUNA firmly believes the NCUA’s risk-based capital rule is a solution in search of a problem,” said CUNA president/CEO Jim Nussle in a statement. “Since the initial proposal 20 months ago, CUNA and the leagues worked together to execute one of the most coordinated and successful advocacy campaigns in the past 15 years to ensure we significantly impacted the final rule to get the best possible results for credit unions. Without our advocacy efforts, there is absolutely no question that the final rule would have been much worse for credit unions. We thank the agency’s intention to have a supplemental capital rule in effect by the effective date of this rule to allow supplemental capital for purposes of risk-based capital compliance.”
Nussle said CUNA is disappointed NCUA retained the capital adequacy requirement, and will be pushing for examiner guidance and training to place some boundaries around what it called a “wildcard capital requirement. This final rule remains deeply unpopular and CUNA is disappointed the NCUA didn’t release a study on its rulemaking approach, impact and cost of the rule to lawmakers, stakeholders and credit unions before today’s vote. We encourage the agency to disclose this information.”