WASHINGTON (4/8/14, UPDATED 1:34 p.m. ET)--The National Credit Union Administration could consider allowing credit unions greater access to supplemental capital as it finalizes proposed risk-based capital regulations, NCUA General Counsel Mike McKenna said this morning.
McKenna made his remarks in response to a question during today's ongoing House Financial Services Committee hearing entitled "Who's In Your Wallet: Examining How Washington Red Tape Impairs Economic Freedom."
California Reps. Ed Royce (R) and Brad Sherman (D) each had questions about the RBC proposal for McKenna.
Royce told McKenna he is concerned that the risk weights applied to mortgages under the RBC proposal do not reflect actual risk and are more stringent then the standards imposed on community banks despite credit union generally better delinquency rates.
Royce also questioned whether the RBC rule could prevent some credit unions from making loans to their members.
Both Royce and Sherman asked McKenna why the risk weights in the NCUA proposal differ so much from those imposed in similar regulations placed on comment banks. McKenna noted that the agency has received many comments on risk weights and is looking them over and considering the issue.
The NCUA hopes to work with all stakeholders to make the final RBC rule more effective, McKenna said.
Credit Union National Association President/CEO Bill Cheney said of the hearing comments, "It's terrific to see and hear Congress' deep interest in the subjects of credit union capital and business lending. We have urged Congress to take a particular interest in the proposed risk-based capital rule, and clearly the issue has piqued interest."
He continued, "The questions about the risk-based capital proposal reflect a level of concern in Congress that the proposal is in need of significant improvements. We appreciate that NCUA has indicated it will consider changes and we will continue to encourage them to do so.
"Meanwhile, as credit unions file their comment letters with the agency on the proposal, we are urging them to share their comments with their lawmakers, so that Congress can keep a watchful eye on this issue going forward."
During the hearing, Royce also took a moment to draw attention to his Credit Union Residential Loan Parity Act, which he noted would increase the amount of capital made available to small businesses and also increase the amount of rental housing available to Americans. McKenna said the agency has reviewed Royce's legislation and has no concerns about it.
Watch News Now Wednesday for more.