ALEXANDRIA, Va. — Proposed new capital requirements for credit unions are likely to be introduced in the first quarter of 2014, NCUA Chairman Debbie Matz told Credit Union Journal Thursday.
Matz declined to offer more details about what those requirements might look like, but the move would come on the heels of actions by other financial regulators to raise bank capital buffers to avoid the shortages that helped propel the financial crisis.
Earlier this year, Matz said NCUA was working on building a new risk-based capital framework tailored to protect the credit union community from losses.
"The one-size-fits-all credit union capital regime is outdated and insufficient," Matz told attendees at NAFCU's annual convention in July. "For many, if not most, credit unions, 7% of assets may still be appropriate. For higher-risk credit unions, it can be a prescription for disaster when the next crisis hits. We need a flexible, forward-looking standard that makes sense for today and tomorrow."
Matz said the current 7% leverage capital standard set by Congress in 1998 "was really just a best guess" at future requirements to protect safety and soundness. The recent financial crisis and industry changes, she said, require a modern approach.
Matz's current comment came after the NCUA's monthly board meeting — the final for 2013 — at which the board reduced the budget for Temporary Corporate Credit Union Stabilization Fund by over 20% for the second year in a row.
The fund currently has nearly $3.9 billion in assets as of Sept. 30. Credit unions will not be required to pay an assessment to operate the fund next year.
The board also finalized rules allowing federal credit unions to establish charitable donation accounts. The accounts let the sponsors make charitable contributions with investments that have higher expected rates of return than federal credit unions are usually allowed.
