CUNA News
  • LOG IN
  • Create Account
  • Sign Out
  • My Account
  • LOG IN
  • Create Account
  • Sign Out
  • My Account
  • Topics
    • Community Service
    • Compliance
    • Credit Union Hero
    • Credit Union Rock Star
    • Credit Union System
    • Directors
    • Human Resources
    • Leadership
    • Lending
    • Marketing
    • Operations
    • Policy & Issues
    • Sales & Service
    • Technology
  • Credit Union Magazine
    • Buyers' Guide
    • COVID-19
    • Digital Edition
    • Credit Union Hero
    • Credit Union Rock Star
    • Subscribe
    • Advertise
    • Contact
  • Advertise
  • Awards
    • Nominate Credit Union Hero
    • Nominate Credit Union Rock Star
  • Podcasts
  • Videos
  • Contact

News

Home » NCUA's proposed CCULR of 10% too high to help majority of CUs
Policy & Issues

NCUA's proposed CCULR of 10% too high to help majority of CUs

October 14, 2021
NCUALogo

Any changes to risk-based capital requirements—including the proposed adoption of a complex credit union leverage ratio (CCULR)—requires a delay of the Jan. 1, 2022 RBC effective date, CUNA wrote to NCUA Thursday. CUNA submitted its comments on the CCULR proposal, which allows credit unions that meet certain criteria to opt into the CCULR framework.

CUNA also reiterated its long-standing position that the 2015 RBC rule is “functionally unnecessary” and will place significant burdens on credit unions at a significant cost to credit union members.

NCUA proposed the CCULR framework at its July meeting. 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.

The minimum net worth ratio would initially be 9% on Jan. 1, 2022, and then gradually increased to 10% by Jan. 1, 2024.

A qualifying complex credit union that opts into the CCULR framework and that maintains the minimum net worth ratio would be considered well capitalized.

“We believe 10% is excessive and will result in an “option” that is not practical for many, if not most, complex credit unions… a CCULR of 10% would likely force some credit unions to make financial decisions aimed solely at ensuring their net worth is at least 10% (and thus able to apply the CCULR) or make business decisions involving different uses of their capital aimed at serving their members,” the letter reads. “Therefore, in order to actually relieve the regulatory burden associated with the RBC requirements, we urge the NCUA to decrease the (permanent) CCULR level from 10% to 9%.”

“Thus, it is crucial that the level be high enough to maintain strong capital levels in the credit union system and ensure safety and soundness. However, it is equally important that the level be low enough to provide a realistic option for complex credit unions considering whether to pursue the CCULR over the RBC alternative,” the letter adds.

CUNA appreciates NCUA’s proposed transition period of two years, but also notes that an extended transition period—such as four years—would be more appropriate, in light of the continued economic challenges and depressed net worth ratios amid the ongoing pandemic.

KEYWORDS NCUA
Credit Union Magazine: Spring 2022

Spring 2022

Credit Union Magazine’s Spring 2022 edition profiles four Credit Union Heroes and examines CUNA's advocacy priorities, the advocacy army, and financial well-being for all.
Digital Edition •  Subscribe

Trending

  • FOM modernization bill passes House Financial Services Committee

  • CISA issues emergency directive on VMWare vulnerabilities

  • Central bank digital currency creation needs ‘serious, exacting’ consideration

Tweets by CUNA_News

Polls

Are you ready for CECL?

View Results
More

Champion for the Credit Union Movement

Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.

More CUNA

  • Membership
  • Contact Us
  • Careers

Resources for

  • Credit Union Advocates
  • Leagues
  • Press
  • Providers

Our Affiliates

  • American Association of Credit Union Leagues (AACUL)
  • Credit Union Awareness
  • Credit Union House
  • CUNA Strategic Services
  • National Credit Union Foundation
GET CUNA UPDATES
© 2022 Credit Union National Association | ADA Compliance Notice & Legal
Email Us