WASHINGTON–CUNA has sent a letter to the House Financial Services Committee to encourage the committee to consider H.R. 2769, the Risk-Based Capital Study Act.
The letter, from CUNA CEO Jim Nussle, states that “of particular concern is NCUA’s proposal to set a risk-based capital standard for the purpose of determining whether a credit union is well-capitalized. As we discussed with the Committee previously, and as former Senate Banking Committee Chairman Alfonse D’Amato stated eloquently in his comment letter, the Federal Credit Union Act permits the NCUA to impose a risk-based standard for the purpose of determining capital adequacy only.”
Nussle continued, stating that credit unions also have “significant concern with the additional regulatory burden this proposal would cause, and they question whether the cost of the proposal is justified. Our analysis of the proposed rule shows that it would have done very little to reduce costs to the National Credit Union Share Insurance Fund (NCUSIF) had it been in effect during the most recent financial crisis. The current Prompt Corrective Action (PC) system served very well during that crisis, with relatively few credit union failures.”
The legislation, which was introduced by Rep. Stephen Fincher (R-TN), Rep. Dennis Heck (D-WA), and Rep. Bill Posey (R-FL), would delay implementation of the risk-based capital proposal pending an NCUA study on the impact the proposal would have on credit unions.
A copy of the full letter can be found in CUToday.info’s The Gov section.