ALEXANDRIA, Va. (1/22/15)--National Credit Union Administration staff provided a breakdown of the agency's revised risk-based capital proposal (RBC2) during a webinar Wednesday. Staff also answered questions from stakeholders--many of whom wanted to know if the NCUA would be providing an online "risk-based capital calculator" to assess the plan's impact on individual credit unions.
"The purpose of the updated rule is not to prevent credit unions from taking risks, it only mandates that if they choose to do so, they must also commensurately hold capital in line with their risk profile," said Tom Fay, senior capital market specialist with the NCUA, who was one of the presenters at the webinar.
According to Larry Fazio, the NCUA's director of examination and insurance, the agency will not be developing a calculator for its website like it did for the previous proposal. This is due to the data needed for estimations differing from the data the NCUA currently has on file from credit unions' call reports.
"We do have, on our website, what's called a risk-based capital estimator. Credit unions can download a spreadsheet and fill it in themselves with more precise data," he said. "For this go-around we're providing a spreadsheet credit unions can fill out to get more accurate information on their individual situations."
The risk-based capital estimator spreadsheet can be downloaded at the agency's risk-based capital resource page. The page also includes the complete RBC2 proposal, the board action memorandum and several other documents.
Also related to an RBC estimator, Credit Union National Association Chief Policy Officer Bill Hampel noted Wednesday, "CUNA is developing an enhanced version of the estimator that will: automate some of the data entry; allow credit unions to analyze the effects of growth and changes in assets composition; and, consider the impacts of different risk weights."
Hampel added, "Our simulator will be posted by the end of the week to CUNA's RBC2 website."
The RBC2 proposal is slated for a 90-day comment period, which will start when it is published in the Federal Register, which is likely to be within the next several weeks.
"We encourage all interested parties to comment," Fazio said. "We'll carefully evaluate all comments and make adjustments when it's sensible to do so, just like we did with the last round of comments."
A closed captioned recording of the webinar will be posted to the NCUA's website in approximately three weeks.
Fazio will be the featured guest at CUNA's risk-based capital webinar, scheduled for Jan. 26. Fazio will be joined by CUNA President/CEO Jim Nussle, Chief Policy Officer Hampel and Deputy General Counsel Mary Dunn.