July 17, 2014

Listening session: Matz details risk weights under review

July 18, 2014 – NCUA will consider lower risk weights related to investments, credit union service organizations, corporate credit unions, mortgages and member business loans as it reviews next steps for its risk-based capital rule, agency Board Chairman Debbie Matz said during Thursday's listening session in Alexandria, Va.

NCUA representatives also said they are taking a serious look at how best to handle interest-rate risk in the final capital rule.

Thursday's session was NCUA's third and final summer listening session. It drew more than 100 participants, including NAFCU member representatives and association President and CEO Dan Berger and other staff.

Matz reiterated that the rule's implementation period will be extended beyond the 18 months in the proposal – a concern brought up by many credit union attendees at all three listening sessions. Credit union attendees also expressed concerns about the agency's proposal to exclude from the risk-based net worth calculation the goodwill value received for serving as a merger partner. NCUA said it might look at grandfathering in goodwill.

NCUA also said it would look into credit unions' concerns about allowance for loan loss leases and the potential for new accounting requirements from the Financial Accounting Standards Board related to the RBC proposal.

Attendees and NCUA staff also talked about examinations and the need for better communication between examiners and credit unions. Attendees were also concerned about NCUA's approach to interest-rate risk. Specifically, credit unions attendees in Thursday's listening session expressed concerns about the 35 percent limit of assets in long-term assets.

A recording of Thursday's listening session is online.