LOS ANGELES — Credit union executives peppered NCUA officials during the agency's first "Listening Session" on the risk-based capital rule here Thursday about why the agency continues to refuse to extend the comment period.
"There have been 2,800 letters sent in response to this issue," said Teresa Freeborn, president and CEO of $851 million Xceed Financial in El Segundo, Calif. "We think the issue deserves more consideration because the impact will affect so many credit unions in different ways. We are wondering, what's the rush? Why this? Why now?"
NCUA Chairman Debbie Matz bristled at the suggestion the agency slow down its process to bring the proposed risk-based capital rule to fruition.
But there were more to come.
"We would like to request a second comment period," said Mike Koch, VP of finance at the $1 billion Evangelical Christian Credit Union in Brea, Calif., to applause. "We would like to see some hard data so we can really see what we are looking at."
Matz stood firm.
"You can hold your applause, you're not going to like my answer," she said.
"There's no rush," Matz told the more than 150 credit union representatives, NCUA employees and examiners who attended the session at the Westin Bonaventure Hotel. "We've been discussing this for more than two years. We've put together a group of credit unions — who will remain anonymous — to help with the second draft. We're not rushing into this at all."
That group met for the first time last week, according to Matz.
Matz opened the session by reading a letter from President Obama congratulating the industry on the 80th anniversary of the Federal Credit Union and then gave the audience time to come up with questions in regards to improving regulations and the exam process, mortgages, member business loans, investments and risk weights.
"On the 80th anniversary of this historic legislation, let us remember that — especially in times of crisis — Americans summon the courage to create solutions to our most urgent challenges," President Obama wrote.
In a press release following the session, NAFCU President and CEO Dan Berger said: "NCUA's proposed risk-based capital rule could wreak havoc with the entire credit union industry by putting credit unions, including those that serve our military service members, at a critical competitive disadvantage with banks and put healthy credit unions out of business," he said. "In its current form, the proposed rule would require credit unions to hold an additional $7.1 billion in capital reserves, severely tightening lending."
A handful of questions regarding other topics were asked during the four-hour session, the first of three planned for this summer. In the end, Matz said she hopes to present a final risk-based capital rule sometime this fall.
