WASHINGTON—Both credit union trade organizations are just about in line with a projected price tag for credit unions under the new risk-based capital proposal.
CUNA Wednesday told CUToday.info that it projects credit unions, under the revised RBC proposal, will have to hold an additional $630 million in capital to be considered well-capitalized. NAFCU sets that figure at $729 million.
Bill Hampel, CUNA chief economist and chief policy officer, emphasized that the $630 million essentially represents a hindrance to growth among affected CUs. CUs with assets below $100 million are exempt from NCUA’s new two-tiered RBC rule.
“Virtually all of the credit unions covered by the latest rule already have more capital than they need to be considered well-capitalized under the latest proposal,” said Hampel. “So what is shrinking is the buffer credit unions have above the well-capitalized threshold.”
Last year CUNA and NAFCU estimated the previous risk-based capital proposal would require credit unions to hold about $7 billion in additional capital. Hampel acknowledged the difference.
“We think the agency has listened, and based on their listening made substantial improvements,” said Hampel.
CUNA Deputy General Counsel Mary Dunn emphasized that CUNA’s membership will make the final determination on the latest rule.
“Just reading it, the rule has vastly improved,” said Dunn. “We need our members to tell us what they think. We need our members to take this proposal, assess it for their own operations and then let us know.”
Related
RBC Feedback: ABA Exec Says NCUA 'Gave Up the Ghost.' A CUToday.info Series
RBC Feedback: 10% Threshold 'Absurd' Says CPFCU President. A CUToday.info Series