WASHINGTON — House lawmakers from both parties had tough words Thursday for the National Credit Union Administration about its revised risk-based capital proposal.
The new proposal, released in January, softened several key provisions after the initial proposal issued last year had drawn sharp industry criticism. Yet the capital proposal remains controversial and lawmakers continue to warn the plan will unnecessarily harm credit unions.
"This thing is a disaster," Rep. Blaine Luetkemeyer, R-Mo., a senior member of the Financial Services Committee, told attendees at the National Association of Federal Credit Unions congressional caucus in Washington.
He noted that eight credit unions in his home state "would be downgraded from well-capitalized to adequately-capitalized overnight" as a result of the plan.
Rep. Brad Sherman, D-Calif., a top Democrat on the panel, said that while the revised proposal is an improvement, it does not go far enough.
"The [credit union] movement went through the toughest times without an injection of federal capital and yet there's this push to have what I think are some unreasonable risk-based capital rules," he said.
Several House lawmakers — including Reps. Stephen Fincher, R-Tenn., Bill Posey, R-Fla., and Denny Heck, D-Wash. — introduced a bill in July that would delay finalizing the proposal for more than a year to allow for further study. The measure has nine additional cosponsors.
Compared with the earlier proposal, the revised plan would raise the size cutoff for credit unions considered "complex" to $100 million of assets, up from $50 million. It would also lower the minimum risk-based capital ratio a well-capitalized credit union must attain by 50 basis points to 10%.