NCUA Urges Congress Reconsider Risk-BasedCapital

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WASHINGTON - (09/23/05) -- NCUA General Counsel Robert Fennerasked Congress to include the agency's proposal to enact arisk-based capital system for credit unions, which was carefullyexcluded from a regulatory relief bill introduced last month.Fenner, testifying before a House Financial Services subcommittee,said the agency's current system of minimum capital, known asprompt corrective action, is too inflexible and asked the lawmakersconsider including the risk-based system in the Reg Relief bill.Fenner, who was testifying with representatives of other financialregulators, also said NCUA supports proposals to allow federalcredit unions to provide limited services to non-members withintheir fields of membership; and to clarify the definition of networth for credit unions to allow credit unions to continue tocombine their capital after merging, something a new accountingrule will prohibit. House leaders hope to pass the Reg Relief billover the next few weeks, but the bill is dead for the year becausethe Senate has indicated it will not act on its version of RegRelief until next year.

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