Not Everyone Expects A Hike In Capital Requirement

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BIRMINGHAM, Ala.-Former NCUA Chairman Dennis Dollar sees little chance capital requirements for credit unions will increase.

"I see no reason for credit union capital standards to be increased despite the current economic and financial industry crisis. Increasing statutory or regulatory capital requirements for credit unions is, frankly, just not necessary based upon the lower risk nature of credit union balance sheets and the net-worth calculations being statutorily based upon total assets as the determining numerator," said Dollar, now the principal at Dollar Associates in Birmingham, Ala.

Dollar believes that a separate and independent credit union regulator and insurer will continue, even if capital reform for banks takes place, to ensure the unique structure of CUs are taken into consideration in regulatory matters. "That's something unlikely to happen if credit unions were brought under a for-profit banking regulator such as the FDIC, Federal Reserve, or even the Treasury Department," Dollar advised. "Also, the small amount of savings a consolidated agency might bring would be much more than offset by the political opposition that will come from credit unions motivating their 95-million member base to fight against consolidation."

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