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Aug. 11, 2014 – Senate Banking Subcommittee on Financial Institutions and Consumer Protection Chairman Sherrod Brown, D-Ohio, and numerous others have joined the growing chorus of members of Congress writing NCUA Board Chairman Debbie Matz with concerns about the proposed risk-based capital rule.

Brown, noting concerns from credit unions in his state, pointed out to Matz that the risk weights within the proposal regarding mortgages and member business loans are "substantially higher than those applicable to community banks under their risk-based capital rules." He asked that she "consider credit unions' concerns about parity."

In a separate letters to Matz, Republican Sens. Mike Enzi and John Barrasso of Wyoming, and Georgia Republican Sens. Saxby Chambliss and Johnny Isakson wrote that the agency's proposal on risk-based capital may exceed NCUA's authority due to the proposal's capital requirements.

"The proposed rule would impose a risk-based standard to be considered well-capitalized," Enzi and Barrasso wrote. Yet the Federal Credit Union Act "conveys authority to NCUA only to establish a risk-based standard to take account of any material risk against which the net worth ratio required to be adequately capitalized does not provide adequate protection."

Chambliss and Isakson also pointed out that the National Credit Union Share Insurance Fund "performed remarkably well in the last two financial crises under the current PCA [prompt corrective action] rules" and inquired as to why NCUA is issuing this rule now.

NAFCU is encouraging NCUA to take the time to think about ways to write the final rule that doesn't make the entire industry hold more capital as a substitute for proper supervision and examination. The association continues to raise concerns about the proposal's risk weights, which differ from those of the FDIC, and to urge an implementation period of at least three years.