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.