NCUA tries to meet credit unions halfway on capital rules

ncua tries to meet credit unions halfway on capital rules

Sumary of NCUA tries to meet credit unions halfway on capital rules:

  • The National Credit Union Administration board has approved a proposed rule to allow “complex” credit unions to opt out of its controversial risk-based capital requirements if they maintain a minimum net-worth ratio.
  • The board by a 3-0 vote issued a notice of proposed rulemaking that would establish the “complex credit union leverage ratio.
  • ” Under the measure, credit unions with at least $500 million of assets meeting a leverage ratio of at least 9% can avoid burdensome risk-based standards that go into effect next year.
  • That provides community banks with an off-ramp from complicated risk-based capital requirements if they meet a minimum leverage ratio.
  • Both the community bank and credit union “standards seek to strike a balance among several objectives including maintaining strong capital levels, protecting safety and soundness and simplifying compliance,” said NCUA Chairman Todd Harper at the board meeting.
  • At the meeting Thursday, the board also heard a presentation about the potential intersections between blockchains, cryptocurrencies, fintech and credit unions, and issued a request for more information to gain public feedback.
  • NCUA board member Rodney Hood said his preference would be to table the risk-based capital rule indefinitely or for the board to even consider repealing it.
  • “The world has changed considerably since 2015.”Bloomberg News The NCUA’s leverage ratio plan attempts to find a middle ground between maintaining capital requirements for larger credit unions while responding to industry complaints that the risk-based capital regime — set to go into effect next year — would pose an undue burden.

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