ARLINGTON, Va.—NAFCU’s member credit unions are expressing three concerns over NCUA’s revised risk-based capital proposal. According to the results of the group’s monthly Economic and CU Monitor survey, credit unions are saying:
- While the risk-weights have changed from the initial proposal, NAFCU members do not agree with the revised risk weights, which they continue to find to be too high, especially related to mortgage servicing assets, according to NAFCU’s chief economist, Curt Long.
- While the revised proposal has increased to $100 million from $50 million the threshold for being defined as “complex,” NAFCU-member CUs do not believe a bright line asset size definition should be used at all. Instead, CUs believe it’s the menu of products and services a credit union offers, as well as whether it invests in products such as derivatives, that should define complex, according to Long.
- Long said NAFCU CUs reacted “very strongly” to the question, “Do you think the revised risk-based capital rule will effect you now and in the future?” He said respondents to the survey indicated that the proposed RBC rule will impact lending, capital, and other critical areas of business.
Long said NAFCU will be using the response it received to the Economic and CU Survey as well as other feedback as the association formulates its comment letter to NCUA on its revised risk-based capital rule.