Hensarling, Capito lodge RBC concerns with NCUA
June 23, 2014 – House Financial Services Committee Chairman Jeb Hensarling, R-Texas, and Financial Institutions and Consumer Credit Subcommittee Chairman Shelley Moore Capito, R-W. Va., wrote NCUA Board Chairman Debbie Matz last week noting concerns that the proposed risk-based capital rule would put credit unions at “a competitive disadvantage.”
“The proposed rule will require affected credit unions to hold higher levels of capital if the credit union has high levels of concentration in assets like mortgages, member-business loans, and long term investments,” Hensarling and Capito noted. “While we agree that a credit union’s concentration risk should be closely monitored, it is our understanding that this risk is considered as part of the supervisory and examination process.”
“It appears that the inclusion of concentration risk as part of the calculation of capital rules could be redundant and place credit unions at a competitive disadvantage relative to other insured depository institutions,” they continued.
They also urged Matz to extend the proposed 18-month implementation period to allow credit unions sufficient time to comply with the proposed rule.
NAFCU has urged NCUA to either withdraw the proposed rule or make major changes and issue a one for comment. It has encouraged members to participate in NCUA’s planned listening sessions this summer in Los Angeles, Chicago and Alexandria, Va., to share their concerns about the proposal.
NAFCU on capital reform