April 27 is RBC2 comment deadline: CUNA webinar available online

January 27, 2015

WASHINGTON (1/28/15)--The Credit Union National Association is strongly encouraging credit unions to comment by an April 27 deadline on the National Credit Union Administration's second-round risk-based capital (RBC) proposal.

CUNA has posted a free, recorded version of its 60-minute Jan. 26 RBC2 webinar online.  It features NCUA Director of Examination and Supervision Larry Fazio, CUNA President/CEO Jim Nussle, CUNA Chief Policy Officer Bill Hampel, and CUNA Deputy General Counsel Mary Dunn discussing in detail the revised RBC plan. 

CUNA has noted "significant improvements" in the agency's revised plan and is seeking credit union comment on how the new proposal will affect their operations, and what further improvements are necessary.

CUNA soon will issue a Comment Survey asking credit unions to address specific points of the proposal. 

For instance, CUNA strongly advocates for the ability of credit unions to use supplemental capital, both for this proposal and for the purposes of meeting prompt corrective action requirements.  This will be one of the issues CUNA raises in its comment letter.

Also, while weighted average life was not factored into the risk weightings in the revised RBC plan, the NCUA is still focusing on interest rate risk (IRR).  The agency has asked for comments on alternative approaches that could be taken in the future to address IRR within prompt corrective action.

CUNA will be reviewing this area closely and seeks to develop, with credit union recommendations, ways to address any safety and soundness issues, but without tough new requirements on well-managed credit unions.  

CUNA has red-flagged other ongoing concerns regarding the RBC2 plan.  They include:

  • Whether a two-tiered, risk-based capital system is permitted under the Federal Credit Union Act; and
  • Is there a need for complex credit unions to continually assess their overall capital adequacy on an ongoing basis.

Credit union stakeholders also are encouraged to submit questions about the proposal to CUNA at the email address, and the organization will be posting an updated frequently-asked-questions document with answers as they become available.

CUNA is also designing a high-level breakout session dedicated to RBC2 questions, concerns and comments to be held during its upcoming Governmental Affairs Conference here from March 8-12.

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