WASHINGTON (6/4/14, UPDATED 5:21 p.m. ET)--The leadership of the Senate Banking Committee has asked federal credit union regulators to carefully consider any negative impact their risk-based capital proposal could have on credit unions' agricultural lending and on their ability to raise and maintain certain capital levels.
Sens. Tim Johnson (D-S.D.), the banking panel's chair, and Mike Crapo (Idaho), its ranking Republican member, were addressing the National Credit Union Administration's plan that would replace existing risk-based net worth requirements with new risk-weighted asset and capital requirements. The rule, issued for comment in January, would apply to federally insured "natural person" credit unions with more than $50 million in assets.
The NCUA reports it has received more than 2,000 comments on the risk-based capital (RBC) plan. The Credit Union National Association, in its comment letter, said, "(T)he economic and legal issues spawned by the proposal are numerous, the policy questions are real, and, as evidenced by the overwhelming level of interest in this rule, the stakes for credit unions and their 99 million member owners could not be higher."
CUNA emphasizes a willingness and desire to work with the NCUA on both a comprehensive strategy and on a narrower new rule approach.
In a response sent last Friday to 324 members of Congress who voiced concerns regarding the RBC proposal, NCUA Chair Debbie Matz indicated some of the areas in which the agency will consider changes. She noted that risk-weights, implementation time, and the proposal's impact on credit markets were among issues the regulators would review carefully moving forward.