ALEXANDRIA—NCUA board member Mark McWatters outlined his perspective on the risk-based capital rule in the November issue of The NCUA Report.
Restating that he will not consider the rule for adoption unless it is re-proposed with a comment period of not less than 60 to 90 days, McWatters reminded that the “devil is in the details.”
McWatters explained that as he formulates his position on the revised proposed rule, in the interim he is assessing:
- Whether NCUA has the legal authority to apply a separate risk-based capital regime to well-capitalized credit unions.
- How to remove interest rate risk from the individual risk weights.
- How to simplify the incorporation of concentration risk in the individual risk weights.
- How to modify the individual risk weights.
- How to define a “complex” credit union.
- How to make the individual minimum capital requirement operate in a less problematic manner.
- Whether certificates of indebtedness can be used as a form of credit union capital.
McWatters noted that many challenges remain for credit unions and NCUA in working through these issues.
“As we move forward to meet those challenges, we must do so in a thoughtful manner,” he said.
At Thursday’s NCUA board meeting, McWatters expressed opposition to the 2015 NCUA budget, voting no on all budget items. The budget passed with a 2-1 vote.
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