BOSTON — NCUA Chairman Debbie Matz on Friday revealed some new details regarding a proposed rule under development that would increase net worth requirements for credit unions with more than $50 million in assets.
Matz made the announcement during her general session address at NAFCU’s 46th Annual Convention in Boston.
Matz said the current 7% net worth requirement would remain the floor requirement, as defined by the Federal Credit Union Act. However, credit unions with more than $50 million in assets would be subject to higher risk-based net worth requirements.
“The result would be a higher cap for credit unions with higher concentrations of risky assets,” Matz said.
According to NCUA Public Affairs Specialist John Fairbanks, the proposed rule is expected before the end of this year.
In March, NCUA Deputy Inspector General James Hagen recommended the NCUA amend capital rules to require a higher level of risk-based net worth for credit unions with higher levels of concentration or other risks in their member business loan portfolio. That recommendation was part of the IG’s Material Loss Review for the failed Telesis Community Credit Union.
Larry Fazio, director of the Office of Insurance and Examination, said in February the NCUA was developing a risk-based capital rule that he described as “Basel lite,” saying it would have a general but simplified Basel framework.
In her speech Friday, Matz reaffirmed her pledge that the NCUA will not impose Basel III standards on credit unions.
“Basel III is not for this industry,” she said.
Also at NAFCU Annual Conference:
- 4 Big Things from Confab
- Becker Calls it a Wrap
- Dollar Says Let Golden Goose Live
- Thursday in Pictures
- Non-Interest Income Balance
- Berger Promises Training Boost
- CFPB is Good for You
- Beantown Vox Populi
- Wednesday in Pictures
- Non-QMs Offer Opportunity
- Managing Outsourced Collections
- Losing Money at Loan Closings
- New Officers for 2013-2014