RBC, IRR, FOM issues raised in CUNA meeting with NCUA's vice chair

December 8, 2014

ALEXANDRIA, Va. (12/9/14)--Risk-based capital (RBC), interest-rate risk and a potential field-of-membership proposal were the chief topics of discussion between Credit Union National Association senior staff and National Credit Union Administration Vice Chair Rick Metsger during a meeting Monday.

Metsger expressed interest in working to draft a rule in 2015 to address inequities in field-of-membership rules for credit unions.

CUNA Chief Operating Officer Rich Meade and other CUNA senior staff met with Metsger and NCUA Senior Policy Advisor Mike Radway to continue to address concerns about the regulation of risk-based capital and interest-rate risk.

Also attending the meeting for CUNA were Chief Policy Officer Bill Hampel, General Counsel Eric Richard and Deputy General Counsel Mary Dunn.

CUNA discussed with the NCUA a range of RBC issues that should be revised and more positively addressed in the new proposal expected to be issued Jan. 15 for a 90-day comment period. 

While NCUA has already signaled its willingness to address risk weightings, the time for implementation of the final rule, and the authority to require additional minimum capital, among other issues, CUNA is also urging NCUA to reduce the 10.5% RBC requirement for well-capitalized credit unions and make other key changes.

CUNA is also seeking the use of supplementary capital for RBC purposes for any federally insured credit union.

The meeting also focused on interest-rate risk. CUNA does not think that a new IRR rule is needed in light of the fact that the current rule just took effect just over two years ago.

CUNA would like to work with the agency to avoid further regulation and to address any material safety and soundness concerns regarding IRR outside of a rulemaking process.

CUNA welcomed the dialogue with Vice Chair Metsger, Meade said, and added that CUNA looks forward to continuing its discussions with him and Radway as the agency concludes its work on the RBC proposal in the coming weeks.