Consensus Emerges On CapitalReform

ALEXANDRIA, Va. - (10/20/04) -- Representatives of the leadingcredit union groups agreed Tuesday that NCUA should push ahead withits efforts to enact a risk-based capital system for credit unions,but agreement on the issue of secondary capital remained allusive.CUNA, NAFCU and NASCUS representatives all told NCUA during a'Summit on Credit Union Capital,' that NCUA's proposed risk-basedsystem would positively supplant the current net capitalrequirements known as prompt corrective action by providing agreater reserve cushion and freeing up more capital for otherpurposes. But NASCUS, which represents both state chartered creditunions and state regulators, as the only one of the three toexpress unqualified support to allowing credit unions to issuesecondary capital and to count it as net worth under PCA. Theconsensus of the groups speaking Tuesday was that credit unionscurrently have adequate reserves of capital, but could be limitedin raising new capital in the event of a systemic crisis. TheSummit was organized by NCUA Chairman JoAnn Johnson in an effort togive focus to the credit union's lobbying efforts in Congress oncapital.