NCUA Chairman Debbie Matz told Credit Union Times onThursday that roughly 200 credit unions will have to change theirportfolio as a result of the NCUA's proposed risk-based capitalrule that was introduced at the agency's monthly board meeting.

She also said “chronic late filers” of call reports will bepenalized.

According to the proposed risk-based capital rule, to be classified as well capitalized,credit unions with over $50 million in assets would be required tomaintain a risk-based capital ratio of 10.5% or above, and passboth net worth ratio and risk-based capital ratio requirements.

“Most credit unions will not be adversely affected by this rule.There are only about 200 credit unions that will be required tochange their portfolio as a result of this rule,” said Matz afterthe board meeting on Thursday.

“The others will be positively impacted because there will befewer losses as a result of the changes that those other 200 creditunions have to make. So I think that there will be a positivereaction once people sit down and actually read and understand whatwe're proposing,” she added.

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The NCUA board also unanimouslyapproved a final rule on derivatives at the meeting. Matz downplayed concerns amongcredit unions about the cost of the rule.

“We have eliminated the application fees that were proposed whenwe proposed the rule and the supervision fees that were beingcontemplated so those are not in the final rule and any costs thatwe accrue will be paid for out of the share insurance fund,” Matztold Credit Union Times.

“So there will not be an assessment to the industry or toindividual credit unions but I think the cost is really a smallprice to pay for the safety of the industry,” she added.

Last week, the NCUA announced its decision to impose penaltiesagainst credit unions that miss the deadline for filing call reports. Credit Union Times asked Matz ifthe NCUA should have taken a different approach to deter latefiling.

“If there was a better way, I would like for somebody to tell mewhat it is because we have been warning credit unions anddiscussing this issue with them for a very long time,” Matz said.“I was really astounded to discover that there were over 1,700credit unions that filed late last quarter and many of them werechronic late filers and in fact the number had gone upsignificantly year over year.”

Matz assured credit unions that the regulator is not enforcingthe fines to be punitive since the money generated from penaltiesgoes to the Treasury.

“The goal is to get compliance because we can't do our job ifthe credit union data straggles in,” Matz said.

“We're not going to assess a penalty without previousdiscussions with the credit unions executives to find out why itwas late and what can be done about it but for chronic late filers,there will be penalties,” she also said.