WASHINGTON—CUNA is asking the House Financial Services Committee to "thoroughly examine" NCUA's proposed risk-based capital rule and direct the agency to make significant changes to address "serious deficiencies" in the proposal.
The request was made by CUNA President Bill Cheney in an April 2 letter to Financial Services Committee Chairman Jeb Hensarling (R-Texas) and Ranking Member Maxine Waters (D-Calif.). Cheney noted several concerns—already shared with credit unions—about the proposed rule:
- The rule is "fundamentally flawed," as CUNA estimates show it would increase by $7.3 billion the amount of capital credit unions would be required to hold to be well capitalized through the imposition of asset risk-weightings that are "poorly calibrated"—and "in some cases more stringent than what banks face under Basel III."
- Poorly calibrated risk-weights would have a significant, adverse impact on credit unions' ability to serve their members, particularly through mortgage lending and small business loans.
- The time period for implementation is "unreasonably short" at 18 months, as banks under Basel III were given nine years.
Cheney also states the proposed rule is a "solution in search of a problem."
Responding to the letter, NCUA spokesperson John Fairbanks said, "This is a proposed rule, and its importance is underscored by the extended comment period. NCUA will review all comments thoroughly as the process moves along."
CUNA sent the letter in advance of an April 8 Financial Services Committee hearing. CUNA also noted concerns with new Consumer Financial Protection Bureau regulations, including those regarding remittances and mortgages.
