ARLINGTON, Va. — NAFCU has introduced its own risk-based capital calculator the trade association says will help credit unions carefully evaluate the impact of NCUA's proposed capital rule on their operations.
NCUA
NAFCU Chief Economist and Director of Research David Carrier says that unlike NCUA's calculator, NAFCU's version allows credit unions to vary assumptions for return on assets, growth and risk weights for different types of assets.
The trade association said the tool will help credit unions better plan for the future under new risk-based rules as well as drive stronger CU feedback during the proposed rule's comment period.
"We were dissatisfied with what NCUA put out because their calculator does not allow credit unions to adjust any of the risk weights or make any kind of forecast on what impact the rule will have on the future of the credit union," Carrier told Credit Union Journal.
Carrier pointed out that the
"So, with ours, you can change the numbers — say you want to move some of your mortgage backed securities from one category to another," he noted.
NAFCU has received a number of calls from CUs that are using the tool (an Excel file available to NAFCU members on the trade association's website) since it was launched March 7, according to Carrier.
But he pointed out that due to the capital proposal's complexity and the time it will take to run scenarios and draw careful conclusions about the future of the credit union under the new rule, it may be a week or two before credit unions provide the trade association with detailed feedback on the calculator.
PJ Hoffman, NAFCU regulatory affairs counsel, added that being able to adjust risk weights in the NAFCU tool and then see the impact on their own CU will help credit unions make better suggestions to NCUA regarding necessary adjustments to risk weighting.
