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FOR IMMEDIATE RELEASE | January 04, 2018

NAFCU Requests NCUA Make Changes to Capital Planning, Stress Tests

FOR IMMEDIATE RELEASE

Washington (Dec. 28, 2017) -- In response to the National Credit Union Administration's (NCUA) proposed rule on capital planning and supervisory stress testing, National Association of Federally-Insured Credit Unions (NAFCU) Regulatory Affairs Counsel Andrew Morris today issued a letter recommending the NCUA work to increase transparency and flexibility. In the letter, Morris identifies key areas NAFCU believes the NCUA should consider in an effort to help credit unions continue to grow:

· Covered credit unions' tiers and stress testing parameters should be scaled to promote more meaningful relief.

· NCUA should evaluate the capital plans of very well capitalized credit unions through the supervisory process.

· When NCUA reserves the right to conduct its own stress testing, it should adopt transparent procedures for collection and validation of stress test data.

"NAFCU believes that a tiered regulatory approach is a good first step, but is fundamentally limiting – particularly for the largest credit unions," said Morris. "Capital planning requirements should not only be tailored based on the complexity and financial condition of covered credit unions, but also contextualized in terms of overall industry risk."

Morris went on to say, "Credit unions are less risky than banks, as evidenced by the industry's resiliency during the financial crisis, so it would be appropriate to adopt flexible supervisory guidance with respect to evaluation of capital plans. Furthermore, credit unions continue to demonstrate exceptional financial health. Based on these factors and the strong capital position of the credit union industry, NAFCU believes that NCUA's safety and soundness mission can evolve beyond the capital planning assumptions which arose out of the financial crisis."

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The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation's federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go towww.nafcu.orgor@NAFCUon Twitter.