NAFCU: NCUA's response to Hill on RBC inadequate
June 2, 2014 - NAFCU President and CEO Dan Berger on Friday reiterated for lawmakers the association's key concerns about NCUA's risk-based capital proposal in response to NCUA Board Chairman Debbie Matz's letter answering questions raised by 324 lawmakers about the proposed rule.
Berger, writing within minutes of Matz's own reply to lawmakers, underscored the association's concerns about the proposed rule, key among them:
- the agency's proposed risk weights are inappropriate and should be aligned with the risk weights used by FDIC for community banks;
- the proposal affects not hundreds but thousands of federally insured credit unions, which will be required to adjust their balance sheets or raise more capital to comply;
- the current proposal should be withdrawn and a new modified proposal reissued with a new comment period.
Ultimately, NAFCU believes NCUA lacks the legal authority to issue the rule as proposed and that legislation is needed to ensure a fair capital system for credit unions.
Matz's letter on Friday was in answer to the one sent to her two weeks ago by 324 House members and spearheaded by Reps. Peter King, R-N.Y., and Gregory Meeks, D-N.Y. She addressed the reasons the agency proposed the rule, its calculation of risk weights, the costs of the proposal, the comment period for the proposal and the timeline for its implementation.
The comment period on NCUA's proposal ended May 28; by Thursday morning, NCUA had counted 1,850 comment letters so far and was still processing letters. This is the largest response to an NCUA proposed rule since 1995, when 1,300 letters were sent on the agency's proposal corporate rule.
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