Newsroom

October 22, 2012

Basel III incompatible with FCU Act, Becker says

Proposed Basel III capital requirements, which do not specifically apply to credit unions, are not compatible with the statutory framework on capital established under the Federal Credit Union Act, NAFCU President and CEO Fred Becker said Monday.

The proposed rules, issued jointly by the Federal Reserve Board, the Office of the Comptroller of the Currency and the FDIC, impose stricter capital, leverage ratio and liquidity requirements on banks.

In an Oct. 22 comment letter to the banking agencies and copied to NCUA Chairman Debbie Matz, Becker pointed out that the FCU Act imposes particular capital requirements and leverage ratios that measure a credit union's net worth and net worth ratios. Net worth is limited to the credit union's undivided earnings and regular reserves, he noted, while the net worth ratio is the ratio of a credit union's net worth to its total assets.

NAFCU is in regular contact with NCUA about any changes or modification to capital rules that credit unions must follow.