ALEXANDRIA, Va. (6/30/14)--Sen. Roy Blunt (R-Mo.) joined an ever-growing chorus of legislators expressing concern with the National Credit Union Administration's risk-based capital proposal in a letter filed Friday. Blunt, the House Minority Whip from 2007 to 2009, said that many Missouri credit unions have contacted him to express their concerns with the proposal.
"I agree with the Missouri credit unions and my numerous House and Senate colleagues that the proposed rule will unintentionally adversely affect the business of credit unions, is inconsistent with current statutory requirements and should be reconsidered by the NCUA," the letter reads. "I ask the NCUA to take into consideration the cost and burden of implementing these new risk-based capital requirements and provide justification as to why, with the limited ability other than retained earnings, an across-the-board approach regarding risk weights is necessary at this time."
Since the NCUA issued their proposal, more than 10 current and former federal legislators have filed individual comment letters. A letter signed by 324 representatives, also urging changes, has also been filed.
The NCUA's proposal adds a risk-based standard requiring 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. It would also give the agency the right to require credit unions to hold additional capital on a case-by-case basis.
The Credit Union National Association filed a 47-page comment letter outlining its issues with the proposal, including what it believes is an overstepping of NCUA authority under the Federal Credit Union Act, restrictions on credit union lending and an inadequate implementation period.