WASHINGTON (7/9/14)--Rep. Patrick McHenry (R-N.C.), chair of the House Financial Services subcommittee on oversight and investigations, has asked National Credit Union Administration Chair Debbie Matz for several clarifications to the agency's risk-based capital (RBC) proposal.
The letter requests that the NCUA submit answers to a series of questions to the subcommittee no later than 5 p.m. July 18.
The NCUA's proposal would require credit unions to hold capital at 8% of risk-based assets in order to be considered adequately capitalized and 10.5% to be considered well-capitalized. This is in addition to the 6% and 7% leverage ratio requirements to be adequately and well-capitalized. The NCUA would also reserve the right to require credit unions on a case-by-case basis to hold additional capital.
"It is my understanding that this rule would institute far-reaching changes in the Prompt Corrective Action regime, including replacing the agency's current risk-based net worth requirements with new requirements for federally insured credit unions with over $50 million in assets," McHenry's letter reads.
"Given the breadth and scope of the changes the proposed rule would make, the implementation stage will be critical. As a matter of fairness and transparency, the public deserves the opportunity to understand the logic behind this proposal."
McHenry requested that the NCUA provide the subcommittee with the following information: