McHenry Letter Elevates Risk-Based Battle
House Financial Services Subcommittee on Oversight and Investigations Chairman Patrick McHenry (R-N.C.) has asked NCUA Board Chairman Debbie Matz for documentation regarding the rationale behind the agency’s proposed risk-based capital rule.
“I ask that you provide the subcommittee with information about how the rule was developed and what impact it will have on the credit union community in terms of growth and innovation, as well as any impact on the larger economy and job creation,” McHenry wrote in a letter to Matz Monday.
McHenry asked the NCUA to publicly disclose in writing by July 18 any cost-benefit analyses performed, metrics on asset classifications and justification for revised risk weighting for each asset class.
He also asked for an explanation of the extent to which NCUA examiners would be authorized to make capital recommendations to credit unions that might deviate from the standards set in the rule.
“As a matter of fairness and transparency, the public deserves the opportunity to understand the logic behind the proposal,” McHenry wrote.
"Clearly this issue has risen to a level of attention on the Hill where senior members of the committee of jurisdiction are registering their active interest. An issue of this importance merits this, and I think it contributes to an ultimately positive outcome," said John McKechnie, partner at Washington lobby and communications firm Total Spectrum.
Brad Thaler, NAFCU vice president of legislative affairs, said McHenry’s letter demonstrates that Congress wants as much transparency as possible in the NCUA’s rulemaking process. Thaler told CU Times many in the credit union industry support a second comment period once changes are made to the proposal.
“This letter shows that this issue is still on the Capitol Hill radar screen,” Thaler said. “Individuals in leadership positions are watching the agency’s actions.”