Hunt in CUTimes: ‘Capital is not king’
Dec. 18, 2013 – NCUA’s need to change capital rules was questioned by NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt in an editorial published Tuesday by CU Times.
“Capital is the regulators’ cure-all to ‘risk,’” Hunt wrote. “Since NCUA first announced it was looking at capital rules, NAFCU has pushed back every step of the way. We have asked the agency to show us why new capital rules are necessary. We asked to be included in the discussions prior to any rulemaking.”
Hunt said credit unions are already well-capitalized, averaging 10 percent. She also said most credit union losses have involved credit unions with less than $50 million in assets, which NCUA has said would not be included in its rulemaking.
“At NAFCU, we believe that ‘enough is enough,’” Hunt continued. “Credit unions are drowning in regulatory burden, and the latest push from NCUA could not come at a worse time. Credit unions are different. The fact that capital rules are changing for banks does not mean that there is additional risk in the credit union system.”
Hunt called on Congress to make statutory changes to create a fair risk-based capital system for credit unions that acknowledges the true level of risk involved, rather than allowing NCUA to “force credit unions to hold more capital” as a way to address unfounded fears about risk.