ALEXANDRIA, Va.—NCUA Board Member Mark McWatters Thursday voted against approving the new risk-based capital proposal, saying the agency lacks the authority to issue a two-tiered RBC rule.
The NCUA board today voted 2-1 to approve the new proposed risk-based capital rule.
But board Vice Chairman Rick Metsger, who along with Chairman Debbie Matz voted in favor of issuing the proposal, said he disagrees with the interpretation that NCUA lacks the authority.
“We have a statutory responsibility to issue this rule. We have a duty to design a system that is comparable to the FDIC’s RBC rules,” said Metsger.
He said a “number of people have taken one portion of the FCU Act out of context and suggest that NCUA does not have the authority to issue this risk-based rule.”
He further said the Chevron Standard is also being misinterpreted, and that NCUA’s general counsel agrees the agency has the authority to issue a two-tiered RBC proposal.
“The reference to section 216D in the FCU Act provides a floor and not a ceiling on RBC, and does not preclude a two-tiered system,” said Metsger. “If down the road there is ever a decision to have a single standard for RBC, I would certainly not consider going to the lower standard. I would go to the higher number.”
Full statements from McWatters, Metsger and Chairman Debbie Matz can be accessed here.
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