May 21, 2014

Matz talks minimum capital requirement, MBL

May 21, 2014 – NCUA will consider clarifying the "individual minimum capital requirement" described in its risk-based capital proposal and anticipates making changes regarding the rule's impact on member business lending, a credit union trade paper reported Tuesday.

Quoting NCUA Board Chairman Debbie Matz, Credit Union Journalreported that with respect to the proposal's individual minimum capital requirement, the agency is likely to clarify that any final decision regarding this provision's application to an individual credit union will be made by the NCUA Board.

"Our intent was that if the examiner feels a credit union should hold more capital above and beyond what is required in the rule, they would have to go to their supervisory examiner, who would have to go to their regional director, who would then have to go to the board. Many steps would have to be worked through and, ultimately, the board makes the final determination."

The article also quotes Matz pointing out, as she did in her column in this month's agency newsletter, that NCUA isn't aiming to put out of business those credit unions that were chartered specifically to provide member business loans and which are excepted from the statutory MBL cap through a grandfather provision. "It was never our intent to put out of business credit unions whose sole purpose is making business loans…," she is quoted saying.

NAFCU continues to communicate its numerous concerns about NCUA's proposed capital rule and is encouraging all credit unions to submit their comments by the agency's deadline of May 28.