ARLINGTON, Va.—NAFCU has sent a letter to NCUA regarding the agency’s risk-based capital rule.
In the letter, NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt wrote, “Credit unions and the National Credit Union Share Insurance Fund performed very well during the financial crisis, and since RBC was first proposed, the health of the credit union industry has only continued to improve. In fact, as of March 2016, the number of CAMEL code 4 and 5 credit unions has fallen from 409 in December 2011 to 218.
“As the agency explained in the rule’s preamble, RBC was developed, in part, to identity risk outliers that posed potential threats to the NCUSIF,” continued Hunt. “In the months since RBC has been finalized, though, there have been several regulatory developments that more adequately confront the risks that RBC was initially intended to address. One of these risks was interest rate risk (IRR). Thankfully, the agency removed IRR provisions from the final rule, electing instead to address IRR through the use of a tool during examinations.”
Hunt concluded by saying, “Ultimately, NAFCU believes comprehensive capital reform for credit unions, such as allowing credit unions to have access to supplemental capital sources, and making the statutory changes necessary to design an appropriate capital system for credit unions, requires further study and debate.”