COLUMBUS, Ohio—The CEOs of Ohio’s credit unions are split on whether it was worth providing comments to NCUA during round two of risk-based capital, according to interviews conducted by CUToday.info.
Some have been champing at the bit to let NCUA know how they feel about the latest proposal, while others said they will pass this time, citing the time it takes to properly evaluate the rule—again.
And one executive, expressing frustration toward the second comment period—which closes April 27—said the risk-based capital plan is being “shoved down CUs’ throats” and called the entire process “a political hot potato.”
Joyce Warner, CEO at the $35-million AP FCU in Toledo, told CUToday.info during the Ohio CU League’s annual meeting here that she would have liked to comment on the second proposal, if she had the time to carefully dissect the latest version of the rule.
“But at a credit union our size the CEO wears so many hats, so time is an issue,” said Warner, who has led AP FCU for 25 years.
Time Needed To Assess Impact
Not only does it take time to review the lengthy proposal, it takes time to assess the rule’s impact on the credit union, emphasized Tim Boellner, CEO at the $150-million AUR Group Financial in Fairfield.
“I think the latest rule is better than the first,” said Boellner, who does plan to comment by the deadline. “But I will not know for certain until I plug in my numbers and make projections five years out.”
Boellner, too, said finding the time to spend on the rule has been difficult, saying fact sheets from the league and CUNA have been helpful. “But still, examining this rule is a distraction from serving our members.”
A board chairman from an Ohio CU, asking not to be named, assessed that several factors are contributing to CUs commenting late, or not commenting at all. He believes some credit unions are wrestling with where they fit within the latest proposal, some are feeling apathy and “weariness” with the lengthy RBC process, and some shops, especially smaller ones, may lack the expertise to truly evaluate the rule.
Once Is Enough
One credit union exec, asking for anonymity, said his CU commented in round one, and feels that comment is sufficient. Another leader, also opting not to be recognized, called RBC “a political hot potato. There is not much we can do. This is pretty much set in stone. I won’t comment this time—this rule is pretty much shoved down our throats and there is not much we can do to change that.”
Wendy Driver, CEO at the $5-million Emerald CU in Garfield Heights, said she would be sharing several points with NCUA before the comment deadline arrives.
Driver, who commented on the first proposal, commended NCUA for raising the asset threshold for exempting CUs from the rule to
$100 million, and for raising the overall benchmark for a small CU to that same figure. But she still thinks those thresholds should be higher.
What Driver will emphasize in her comment letter is that there should not be a risk-based capital rule.
“I back what the Ohio league said—that this really should be more of a model than a rule,” said Driver.
Dean Pielemeier, CEO at the $85-million Abbey CU in Vandalia, said the agency will have his letter by the 27th. Pielemeier said he is making all of his points this comment period, as he chose not to comment the first time because he knew a second proposal was needed.
Last Chance To Comment
“I knew that first proposal would not make it,” said Pielemeier. “And I still don’t think this latest rule is where it should be. It’s still not a good regulation. Even with the revised risk weights, I think this rule could hinder our lending.”
Thomas Renz, president of the $35-million Commodore Perry FCU in Oak Harbor, encouraged credit unions to send in their letters, especially if they are strongly impacted by the rule.
“You need to get your letters out, and you need to include support for supplemental capital in them,” said Renz, who noted that NCUA listened to CUs and the 2,100-plus letters in round one. “You need to talk about things related to the potential for penalties within RBC. We had a big impact the first time, and if we get more than two thousand letters in this time, we will have a big impact again.”