Scott, Udall, D'Amato lodge RBC rule concerns
Sen. Tim Scott raised concerns about NCUA's proposal in a letter to agency Chairman Debbie Matz.
May 29, 2014 – Sen. Tim Scott, R-S.C., wrote NCUA Board Chairman Debbie Matz on Tuesday with his concerns about the agency’s proposed risk-based capital rule, citing its potentially adverse effect on healthy credit unions and its treatment of risk-weighted assets.
Sen. Mark Udall, D-Colo., also wrote Matz on Tuesday with similar concerns, particularly emphasizing the need to “consider the appropriateness of risk weights that deviate significantly from analogous regulations administered by other federal financial regulators.”
Meanwhile, former Senate Banking Committee Chairman Alfonse D’Amato, R-N.Y., told The Hill that he agrees with credit unions who oppose the rule: “If we had intended in 1998 that there should also be a separate risk-based requirement to be a well-capitalized credit union we would have said so. If NCUA believes that it needs the authority to ensure the safety and soundness of the credit union system, they need to ask Congress to change the law,” said D’Amato,” who worked with NAFCU and credit unions to pass legislation in 1998 to preserve multiple-group charters.
In his letter, Scott wrote: “The NCUA’s risk-based capital proposal imposes a higher risk-based requirement on top of the 7 percent leverage ratio credit unions are required to maintain to be considered well-capitalized. In my view, this approach seems unnecessary and burdensome since credit unions have limited outlets for raising capital and the crisis did not provide evidence for greater credit union capital reserves.” Scott also urged the agency to give credit unions more than 18 months to comply with the rule.
In NAFCU’s comment letter, submitted Tuesday, association President and CEO Dan Berger said NAFCU supports the idea of a risk-based capital regime for credit unions, but NCUA’s proposed rule “is one-size-fits-all and would serve to stifle growth, innovation and diversification.”
NAFCU’s comment letter has been distributed to members of Congress. The comment period for the proposal ended yesterday.
The Hill article
"Berger says RBC proposal 'devastating' to CUs, members, " 5/28/14