Johnson Wants Emphasis On Capital-Related Issues

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NCUA Chairman JoAnn Johnson said she is placing emphasis in 2005 on producing "significant, meaningful improvements relating to capital for all credit unions."

During remarks before NAFCU's CEO Conference, Johnson said she will pursue risk-based capital through statutory change in Congress for natural-person credit unions, and plans to propose a rule before the NCUA Board to allow risk-based capital for the corporate credit union system, lower the RegFlex qualifying net worth ratio from 9% to 7% for well-managed, well-capitalized natural-person credit unions, and also for well-managed, highly-rated low-income credit unions, and will further seek to provide the option for the credit union to release the portion of a secondary capital account that no longer counts as net worth.

Separately, in addition to working with Congress, Johnson said this year the agency will expand the Access Across America initiative to broaden NCUA's partnerships and continue to promote the federal partnerships available to credit unions.

In addition, she said NCUA will continue to update where necessary the "community development credit union rules, low-income designation regulations and other pertinent regulations designed to encourage the establishment and long-term financial viability of community development and low-income credit unions."

"I believe we are focused on an agenda that will modernize regulations and enhance credit union service," said Johnson in remarks before NAFCU's CEO Conference. "I want to reiterate that it is essential to address capital issues for credit unions as it affects the long-term financial viability of the institutions."

Meanwhile, in looking back at 2004, Johnson called it a "year of significant progress" that she said included the following accomplishments: Credit union financial and management performance remained strong with growing assets and increased dollars of net worth; NCUA held the fourth open budget briefing and public forum; the agency adopted a 2005 budget of $148 million, a 1.29% decrease from 2004; it refunded $9 million to federal credit unions from excess cash reserves and to reduce the overhead transfer rate to 57%; federal credit unions continued to expand into low-income communities, adding 27.4 million potential new credit union members in such areas in 2004; NCUA granted more than $1.2 million in technical assistance grants (TAGs) for a variety of uses, and Johnson organized a working group comprised of NCUA staff and CDCU leaders to discuss operational and examination issues.

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