WASHINGTON—The Center for Capital Markets Competitiveness (CCMC) expressed "strong concerns and reservations" about NCUA's proposed risk-based capital rule.
In a
In a letter signed by CCMC Vice President Tom Quaadman, the Center contends NCUA has "failed to take into account critical aspects of how capital is used and, in some cases, has not paid sufficient attention to procedural detail."
Created by the U.S. Chamber of Commerce to promote an effective regulatory structure for capital markets, the CCMC outlined its key concerns:
- Failure to consider impacts on Main Street businesses and the economy.
- Enhanced cost-benefit and economic analysis needed before the risk-based capital proposal can be finalized.
- Resolution of conflicts with other legislative and regulatory initiatives.
- Over-broad application of the risk-based capital proposal and truncated implementation period.
Recognizing the important role credit unions play in the economy, the CCMC stated that CUs are "an important and integral part of the diverse mosaic that makes up the financial system . . . a key fixture that provides the ability of individuals and families to save and borrow to meet the needs of everyday life, prepare for the future or engage in endeavors such as starting or running a business."
Citing credit union's conservative lending practices, the CCMC described CUs as an important provider of liquidity for small "Main Street" businesses, having fulfilled their overall mission of serving people "through a low-risk model that avoids over-leveraging and excessive risk-taking."
The letter concluded that NCUA has not considered how the use of bank-style capital levels may "adversely impact credit unions or the implications of this rulemaking upon the non-financial business community and the broader economy."
