To create a true and fair risk-based capital system for credit unions, we fundamentally believe legislative changes are necessary to bring about comprehensive capital reform for credit unions - such as allowing credit unions to have access to alternative capital sources, and making the legislative changes necessary to design a true risk-based capital system for credit unions. We believe that capital standards for credit unions must be modernized and reflect the realities and challenges of the 21st century financial marketplace.
We have outlined a legislative solution that will institute fundamental changes to the credit union regulatory capital requirements in our Five-Point Plan for Regulatory Relief. The plan, as it relates to capital reform:
- Directs the NCUA to, along with industry representatives, conduct a study on prompt corrective action and recommend changes;
- Modernizes capital standards to allow supplemental capital, and direct the NCUA Board to design a risk-based capital regime for credit unions that takes into account material risks; and,
- Establishes special capital requirements for newly chartered federal credit unions that recognize the unique nature and challenges of starting a new credit union.