BIRMINGHAM, Ala.—Dennis Dollar thinks most CU executives will see the new risk-based capital proposal getting more than two-thirds of the way toward becoming a solid final rule, but that the agency should still expect another large round of comments.
The former NCUA chairman and Dollar Associates principal said that the revised RBC proposal shows “very solid and positive movement” from the original proposal.
“If you judge how far NCUA has come, looking at their journey as a cross-country flight from New York to L.A., I expect most credit unions will see this revised proposal as making it to Denver,” offered Dollar.
Dollar said that terrain remains to be crossed, “But NCUA seems to be well on the way to the destination if they'll continue to listen to concerns from those paying for the trip.”
Based on his discussions with CU leaders, Dollar believes what will draw the largest amount of comment is the revised proposal placing the well-capitalized threshold at 300 basis points above what the current statutes requires.
“NCUA listened to the original commenters and you can tell they took the concerns expressed seriously,” said Dollar. “If they will not get in a rush to meet some artificial deadline for a final rule and be open to any other necessary and responsible changes to make the final rule more balanced between capital building and the ability of credit unions to strategically utilize their capital, I'm still optimistic that they can get it right in the end.”
Dollar reiterated that the revised rule is solid progress from the original. “But I don't think most credit union leaders will consider it quite where it needs to be yet in balancing needs for both the regulator and the regulated."
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