NCUA issued a proposal on a complex credit union leverage ratio (CCULR) at its July 22 board meeting. CUNA supports the option for a CCULR when complying with NCUA’s risk-based capital rule, which was one of two options issued by the agency earlier this year as part of its review of the risk-based capital rule.

“We look forward to reviewing the proposal and are hopeful the CCULR will allow credit unions flexibility when complying with the risk-based capital rule, though we continue to believe the rule itself is functionally unnecessary,” said CUNA President/CEO Jim Nussle. “We support minimizing the compliance burden for credit unions that would otherwise be required to comply with the 2015 rule, and we look forward to submitting more detailed feedback to the NCUA in our comments.”

Credit unions that meet certain criteria will be eligible to opt into the CCULR framework. The minimum net worth ratio would initially be established at 9% on Jan. 1, 2022, and be gradually increased to 10% by January 1, 2024.

A complex credit union that opts into the CCULR framework would not be required to calculate a risk-based capital ratio under the Oct. 29, 2015, risk-based capital final rule. A qualifying complex credit union that opts into the CCULR framework and that maintains the minimum net worth ratio would be considered to be well capitalized.

The proposed rule would also make several updates to the 2015 rule, including addressing asset securitizations issued by credit unions, clarifying the treatment of off-balance sheet exposures, deducting certain mortgage servicing assets from a complex credit union’s risk-based capital numerator, updating several derivative-related definitions, and clarifying the definition of a consumer loan.

Comments on the rule will be due within 60 days of its publication in the Federal Register.

NCUA also issued a request for information seeking comments regarding the current and potential impact of activities connected to digital assets and related technologies on federally insured credit unions, related entities, and NCUA.

Comments on the request for information are due within 60 days of its publication in the Federal Register.