Comments Due to NAFCU: NCUA - Simplification of Risk-Based Capital Requirements
NAFCU would like to highlight the following:
- ANPR proposes two different approaches for simplifying the RBC Rule, which will become effective January 1, 2022. The first approach would replace the risk-based capital rule with a Risk-based Leverage Ratio (RBLR) requirement, which uses risk attribute thresholds to determine which complex credit unions would be required to hold additional capital (buffers). So long as a credit union does not breach thresholds for certain high-risk assets, it would only be subject to the 7 percent net worth ratio requirement. If one or more thresholds are breached, it would trigger an additional capital buffer requirement.
- The second approach would retain the 2015 risk-based capital rule but enable eligible complex FICUs to opt-in to a “complex credit union leverage ratio” (CCULR) framework to meet all regulatory capital requirements. Under the CCULR approach, the NCUA anticipates that eligible credit unions would hold higher amounts of mandatory capital above the seven percent net worth ratio in exchange for an off-ramp from the RBC Rule.
Comments due to NAFCU: March 1, 2021
Comments due to NCUA: 60 Days After Publication in the Federal Register.
NAFCU will send comments on behalf of its members to the NCUA by their deadline (March 1, 2021).