WASHINGTON (6/10/14)--Another voice from Capitol Hill is weighing in on the National Credit Union National Administration's risk-based capital proposal. This time it is Sen. Tammy Baldwin (D), who is urging the federal credit union regulator in a letter today to work with credit unions from her state of Wisconsin to ensure that the RBC rules are "appropriate for the risks on their balance sheets."
"As you know, Wisconsin's credit unions are an important source of financial services in my state. They serve 2.4 million members, many from rural areas.
"These credit unions have contacted me with a number of concerns about the proposal, chief among them is that the rule does not properly capture the risks involved in their lending decisions," Baldwin writes.
The NCUA proposal would, in part, change risk-based capital ratios and require higher minimum levels for credit unions with concentrations of assets in real estate loans, member business loans, or high levels of delinquent loans.
Baldwin's letter today joins more than 2,000 already sent to the NCUA. The contacts include a joint letter sent last week by Sens. Tim Johnson (D-S.D.), the Banking Committee's chair, and Mike Crapo (Idaho), its ranking Republican member, which calls for a clear, well-calibrated, effective RBC rule, letters from Sen. Heidi Heitkamp (D-N.D.), a member of the Senate Banking Committee, Sen. Al Franken (D-Minn.), and former Senate Banking Committee Chair Al D'Amato, as well as a joint letter signed by a bipartisan coalition of 324 House lawmakers.
The Credit Union National Association ardently opposes the RBC plan as written and has expressed to the NCUA a willingness and desire to work with the agency on both a comprehensive strategy and on a narrower new rule approach.
CUNA said in its own letter of comment that the 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.