Risk-Based Proposal No Longer A CapitolIdea

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WASHINGTON - (04/28/06) -- Chances of Congress enacting arisk-based capital system for credit unions continue to dwindle asthe Senate Banking Committee prepares to vote on a regulatoryrelief bill absent the risk-based provision proposed by NCUA. "Weunderstand the Senate bill does not include the proposals for(risk-based capital) or member business loans," said NCUA'scongressional liaison John McKechnie, of a separate proposal tolift the limit on member business loans from the current 12.25% ofassets. Capitol Hill sources said the Senate panel wants itsversion of regulatory relief to be similar to one passed by theHouse last month and to avoid any potential controversies, like thebanker-opposed risk-based capital provision, in order to ease theway to passage. A credit union-specific bill, known as the CURegulatory Improvements Act, which does include the risk-basedcapital provision, is not expected to be voted on this Congress,even with more than 100 House members signing on asco-sponsors.

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