ARLINGTON, Va.—With NCUA intending to remove interest-rate risk from its proposed risk-based capital rule NAFCU is pressing the agency to focus on more improvements.
NAFCU is asking NCUA to make four additional changes before a new proposal is released for comment:
- Definition of well-capitalized: NAFCU contends that NCUA needs to adjust lower the proposed 10.5% risk-based capital ratio requirement and provide better explanation for the rationale regarding the mismatched comparison with an ill-fitting banking model which was proposed.
- Individual minimum capital requirements and the accompanying appeals process: NAFCU asserts that NCUA should remove the individual minimum capital requirements from the second proposed rule. The trade association has also requested that NCUA enact an independent appeals process free of examiner retaliation.
- Definition of a complex credit union: NAFCU proposes that NCUA is required by statute to not only take into account a credit union’s asset size for this definition but also look at the credit union’s portfolio of assets and liabilities.
- Allowance for loan and lease losses cap: The trade association contends that the proposed limits of 1.25 percent of risk assets to allowance for loan and lease losses is too conservative considering the upcoming rule expected from the Financial Accounting Standards Board regarding this issue
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