WASHINGTON— With federal banking regulators moving this week to overhaul bank capital rules, the Defense Credit Union Council is urging NCUA to launch its own broad review of credit union capital and net worth requirements, warning that credit unions could be left at a competitive disadvantage if banks receive relief while CUs remain under an older framework.
In a letter Friday to NCUA Chairman Kyle Hauptman, DCUC Chief Advocacy Officer Jason Stverak said the agency should undertake a “comprehensive review” of regulatory capital and net worth issues, arguing that if banks gain more lending runway—particularly in consumer and mortgage lending—without comparable recalibration for credit unions, the result could be less lending capacity for member-owners, including servicemembers, veterans and military families served by defense credit unions.
“Credit unions share the prudential objective at the core of your agency’s mission: a safe, sound, and resilient system that enables access and protects confidence. We are member-owned cooperatives without shareholders, and we build strength through retained earnings and disciplined lending across economic cycles. That is precisely why parity matters when the broader regulatory environment shifts,” wrote Stverak.
Stverak recommended five specific actions the agency should take:
“First, launch a structured, agency-led review of the current net worth/capital framework to evaluate whether it remains appropriately calibrated to risk and today’s economic conditions, and whether it produces unintended constraints relative to comparable institutions.
“Second, consider risk-sensitive approaches that preserve safety-and-soundness outcomes while better aligning capital expectations with measured risk—especially where calibration choices can affect credit availability for mortgages and other household credit.
“Third, solicit broad stakeholder input through an Advance Notice of Proposed Rulemaking so the agency can gather data, evaluate alternatives, and transparently assess tradeoffs before moving toward a proposed rule or guidance path.
“Fourth, coordinate as appropriate with the federal banking agencies so that the credit union system’s capital framework evolves alongside broader prudential changes and remains comparable in principle— without importing unnecessary complexity.
“Fifth, prioritize flexibility that supports mission-driven lending and responsible responsiveness for defense credit unions serving servicemembers, veterans, and their families—while maintaining the resilience the Share Insurance Fund requires.”
Stverak emphasized DCUC stands ready to support this work.
“We would welcome the opportunity to meet with you and interested board members (or designated staff) to share field-level observations, provide data and examples from defense credit unions, and discuss what a risk-calibrated, safety-forward modernization review could look like in practice,” Stverak said.