PALM BEACH, Fla.— NCUA Board Member Michael Fryzel says its time the agency "right sizes" its rules on risk-based capital.
Fryzel made the statement today during the American Association of Credit Union Leagues' 2013 Winter Meeting.
"Risk-based capital, properly formulated, should match up with the real-world activities of a credit union," Fryzel said. "Greater net worth might be necessary, depending on the type of activities that credit unions pursue as they serve their members. I advocate neither an overly stringent nor an overly permissive approach. I advocate 'right sizing' NCUA’s risk-based rules."
Earlier this year NCUA informed credit unions it is working to propose a new risk-based capital framework to protect the industry and consumers from losses.
"A credit union's function is serving customers' financial needs, which by definition carries risk," Fryzel said. "I want NCUA to recognize that risk, not as an extraordinary characteristic that should be avoided, but as part of doing business as a provider of financial services in the 21st century. I want to see standards that are as minimal as possible and as much as necessary. I will be keeping this vision in mind as NCUA considers changes to the industry’s risk-based capital rules."
