WASHINGTON--The Federal Reserve voted Wednesday to advance a proposal that would reduce a banking capital rule—the enhanced Supplemental Leverage Ratio (eSLR)—for big banks.
By lowering the eSLR standard, the proposed change would allow big lenders to recalibrate the capital they hold on their balance sheet.
Reducing banks’ capital requirement is also backed by the FDIC and the Office of the Comptroller of the Currency, which is led by former NCUA Chairman Rodney Hood.
America’s Credit Unions is calling for parity in capital requirements as the proposal moves forward. A public comment period will take place over the next two months.
“America’s Credit Unions remains committed to securing true capital parity for credit unions as bank rules evolve. While credit unions have a statutory regime separate from banks, capital is key to growth and serving members and we must not be put at a disadvantage to banks. We support other capital regimes that help keep credit unions on an equal footing with comparable banks while maintaining safety and soundness." said America's Credit Unions Chief Advocacy Officer Carrie Hunt. “We will continue to engage with the NCUA, Congress, and other stakeholders to advance these and any other viable strategies. Ensuring a fair, flexible capital regime remains central to our mission of serving America’s 142 million credit union members.”
The Defense Credit Union Council said it is closely monitoring the Federal Reserve’s recent vote, saying it raises serious questions about regulatory fairness, competitive equity, and the continued sidelining of credit unions from capital relief discussions.
"If regulators believe capital rules are overly restrictive for trillion-dollar banks, then it’s long past time to acknowledge how outdated capital regulations continue to restrain credit unions—especially those serving military members, veterans, and underserved communities, said DCUC Chief Advocacy Officer Jason Stverak. "DCUC strongly urges federal regulators to take a more balanced approach. If capital requirements are being relaxed for the largest financial institutions, then regulators should also modernize capital access and retention tools for credit unions."
Stverak pointed out credit unions did not cause financial instability.
"We serve as safe, community-based financial anchors, particularly for America’s military families. If federal agencies are now rethinking capital frameworks, we ask them to include credit unions in that conversation—not as an afterthought, but as an essential piece of ensuring access to affordable, mission-focused financial services," he said. "We welcome further dialogue with relevant stakeholders to ensure the financial system remains competitive, inclusive, and responsive to the needs of all Americans—not just the largest institutions on Wall Street."