WASHINGTON (5/27/14)--In a Friday letter to National Credit Union Administration Chair Debbie Matz, Sen. Bill Nelson (D-Fla.) relayed his concerns about the regulatory agency's risk-based capital (RBC) proposal and its effect on credit unions' ability to serve their communities.
"Credit unions have long played a critical role in serving communities without access to other affordable financial services, promoting thrift among their members and providing a low-cost source of credit," he wrote, adding he was concerned that the proposed RBC rule "may impede these important goals."
Nelson joins Sen. Al Franken (D-Minn.) and Senate Banking Committee member Heidi Heitkamp (D-N.D.) in submitting comments. This is addition to King-Meeks letter signed by 324 members of Congress and a May 7 comment letter from former Senate Banking Committee Chair Alfonse D'Amato (R-N.Y.).
D'Amato's counterpart during the 1998 amendment of the Federal Credit Union Act, former House Speaker Newt Gingrich (R-Ga.) submitted a letter Friday as well. (See related story: Former House Speaker Gingrich: RBC proposal 'extraordinarily troubling.')
The NCUA's proposal would replace existing risk-based net worth requirements with new risk-weighted asset and capital requirements. The rule would apply to federally insured "natural person" credit unions with more than $50 million in assets.
The proposal should reflect the nature of credit unions, the purpose they serve and the types of activities they engage in, Nelson wrote. "Accordingly, I urge the NCUA Board to seriously consider the concerns of credit unions before finalizing the rule to ensure it does not apply a broad brush where a fine-tooth comb is more appropriate," he noted.
Nelson ended his letter with a note of support for efforts to strengthen the integrity of the U.S. financial system and urged that such policies "are reasonably targeted and serve the public interest."