Washington (April 18, 2014) - The National Association of Federal Credit Unions (NAFCU) issued the following statement in response to the National Credit Union Administration’s (NCUA) newly released video regarding the risk-based capital proposed rule. In it, Chairman Debbie Matz talks about the importance of feedback and comment letters on this important rule.
“We at NAFCU could not agree more that credit union comment letters are extremely important. That is why we have requested a 90-day extension of the comment period to allow credit unions the time to evaluate a rule this important and this complex,” said PJ Hoffman, Regulatory Affairs Counsel for NAFCU.
“Chairman Matz also stated that 'the overwhelming majority of credit unions will not be impacted by this rule.' This fails to acknowledge the full impact of the rule. As NAFCU has stated previously, the risk-based capital rule will be one-size-fits-all and create significant burdens because it will force all credit unions with more than $50 million in assets to adjust their capital, not just the 3 percent of credit unions NCUA currently estimates would be downgraded under the proposed rule.”
“Credit unions with more than $50 million in assets will have to hold $6.7 billion more in additional reserves to achieve their current capital cushion level if NCUA’s proposed rule on risk-based capital is adopted.
“This rule as proposed will have unpredictable consequences for loan and share growth, as individual credit unions will need to adjust their balance sheets to meet the new requirement,” Hoffman said. “Given the potentially wide-reaching negative ramifications of this rule, we would support withdrawing it.”
“If not withdrawn, NAFCU calls on NCUA to extend the comment period 90 days so that credit unions can digest the complexity of the rule and provide constructive feedback to NCUA.”
The National Association of Federal Credit Unions is the only national organization that focuses exclusively on federal issues affecting credit unions, representing its members before the federal government and the public.