NCUA Board Member Rick Metsger told Credit Union Times Thursday the proposed risk-based capital rule demonstrates the NCUA’s agency independence, because it did not wait for Congress to act on the issue.
In advance of the January 23 board meeting, both NAFCU and CUNA said any risk-based capital requirement should come from Congress rather than the NCUA.
Metsger said only a handful of credit unions would have to raise more capital under the new rule.
Related NCUA Video Interviews:
A risk-based calculator released by the NCUA on Thursday provides credit unions with an overview of their capital ratio and Prompt Corrective Action category under both the current rule and the proposed regulation. The capital figures are visible to the public as well as credit unions.
“With the tool that has been created … that will be an incentive for them, not only a requirement, but also an incentive to get their house in order, as over 90% of federal credit unions already have,” Metsger said. “Any credit unions will be able to go on, put the name of their credit union in and all the 5300 call data has been all put together so they can instantly see whether (they) are well capitalized or not,” Metsger said.
The board member also said the calculator can assure the majority of credit unions they are considered well capitalized by the NCUA.
“To those that need some work, I don’t think that will be a surprise to them, but it will certainly give them a heads up that they need to get their balance sheet in order,” he added.
In the video interview, Metsger also predicted that the number of late call report filers will drop significantly after the NCUA’s decision to impose penalties against credit unions that miss the deadline.
“Back in December, we established a new policy beginning this call report, in which credit unions will have approximately five more days to file their reports than they have in the past. So they get the additional five days that was added to the pre-existing status so there’s no excuse to be late,” Metsger said.