Monitor: NAFCU members favor risk-based capital
June 17, 2013 – Most credit union respondents to a recent NAFCU survey prefer the idea of a risk-based capital regime to current, growth-restricting capital ratio requirements, according to the June edition of NAFCU's Economic & CU Monitor.
NAFCU Chief Economist David Carrier said, "This June's ECU Monitor added another month of positive news for the credit union industry: member, share, and loan growth are still well above long-run averages. Mortgage originations have doubled at credit unions since the start of the recession, and they've more than tripled their market share over that same period. Loan quality has nearly returned to pre-recession levels. Our member survey indicates that credit unions expect these trends to continue over the coming year."
The report, produced by NAFCU's economic and research team, showed that:
- 62.5 percent of survey respondents believed NCUA should offer a public endorsement of the risk-based capital proposal, which is a crucial component of the NAFCU five-point plan for regulatory relief.
- 34.7 percent believed such a regime would have a positive impact on their credit unions, compared to 18.4 percent who believed it would have a negative impact.
The Monitor acknowledged that compliance could be complicated: "Risk-based net worth is lower and more stable than the net worth ratio, on average. However if risk-based capital were to carry higher capital requirements, 20.8 percent of respondents believed that compliance would be difficult, while 54.2 percent did not."
The report also showed that respondents' net worth ratio increased by 10 basis points to 10.75 percent, in April. Other featured charts included data on loan grown, net interest margins, home sales, and other issues relevant to the credit union industry.
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