5 Big Problems with the Risk-Based Capital Rule
Wednesday marked the final deadline to submit comment letters on the NCUA’s proposed risk-based capital rule. Credit unions and trade organizations included a host of issues in their comment letters, which they want the agency to address in the final rule. Here’s a look at five of them.
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1. Definition of a complex credit union.
2. Supplemental capital not included.
NASCUS said in its comment letter that the NCUA had the authority to include supplemental capital in the rule, but did not.
3. Phase-in period should be doubled
CUNA told CU Times on Wednesday before it officially submitted its letter that the group has asked the NCUA to extend the phase-in period for the final risk-based capital rule to minimum of three years. The proposed rule allows for an 18-month compliance window.
“The proposed risk weight for member business loans is unnecessarily high and the concentration buckets do little to address the true source of risk with this type of product,” said NASCUS’s comment letter.
“We are concerned that the proposed rule would unnecessarily hold back mortgage credit to credit union members because the proposal would impose concentration-based risk weights on mortgages which are substantially higher than those imposed on small banks,” said Mortgage Bankers Association, American Land Title Association, National Association of Home Builders and National Association of REALTORS in a joint comment letter.