LAS VEGAS —Stewart Ramsey, president/CEO of the $1.2 billion Pen Air Federal Credit Union in Pensacola, Fla., questioned the NCUA's urgency to finalize the risk-based capital rule while the economy is still recovering.

“There's still a lot of things unknown and there still appears to be some challenges with having voices heard. Obviously having listening sessions after the comment period ended doesn't seem to be the most logical process,” Ramsey told CU Times at NAFCU's Annual Conference last week in Las Vegas.

“So the fact that she (NCUA Chairman Debbie Matz) is not going to allow or is saying there's not going to be another opportunity to comment due to the magnitude of this particular regulation seems potentially a little shortsighted. So, I would hope there would be a little consideration to allowing us to share our thoughts and ideas again,” he said.

CU Times asked Ramsey for his opinion of the agency's management of the risk-based capital rulemaking process.

“I think, as the NAFCU staff said, this regulation sort of came out of the blue. There wasn't a lot of anticipation that it was coming. I think that's the bigger issue – the sudden urgency, especially after we've come through the economic turmoil time and we're in the supposed period of recovery,” he said.

“Why the sudden urgency to institute this and move it forward? I mean, the regulation overload is getting larger and larger and this is one of those hot- button issues that I don't think has been thoroughly addressed yet,” he added.

In April, Matz told CU Times that requests to extend the comment period until after the Listening Sessions was a delay tactic.

In her remarks at NAFCU's Annual Conference, Matz addressed some of the changes the NCUA is planning to make to the proposal. Ramsey was asked if he feels more prepared for compliance with the rule once it is finalized.

“I don't know if I can say I'm more prepared; probably a little more confused still because the change is coming, so you're not sure what those changes are going to look like,” he said. “The way our balance sheet is structured, we were not going to be impacted by the current way it was being calculated, so we're kind of in a wait-and-see if it would change anything there.”

However, Ramsey said the rule might require his credit union to make future changes in some areas.

“I think it would potentially change the future – how we would go about strategic planning and where we might focus our growth opportunities as we look at different weights,” he said. “It may make us not focus on real estate lending if that has a high weighting structure. We might have to make strategic changes but there's nothing right now that tells me we've got to make any huge changes.”

James Church, board member at the $269 million Freedom Federal Credit Union in Bel Air, Md., told CU Times that NAFCU has been advising his credit union on the details of the risk-based capital proposal.

Church said Freedom Federal already has a contingency plan in place for compliance with the rule.

“The regulatory landscape could be a little dangerous to credit unions but it sounds like NAFCU understands the situation well,” he said.

Earlier this month, credit union executives described concerns with the proposed risk-based capital rule at CUNA's America's Credit Union Conference in San Francisco.

“All it does is add more time and expense to us to have to be compliant. It's a very expensive thing–it takes time, it takes people but you have to do it,” said John Worthington, EVP at the $7.9 billion Security Service Federal Credit Union in San Antonio.

“We have to take the actions necessary but it's a drain on our credit union and it's a drain on our members. It looks like they are trying to throw us into some of the things other financial institutions do not have to do, so we find that somewhat inconsistent,” he added.

Instant Insights /

CEO Questions NCUA Urgency on Risk-Based Capital: On-Site Coverage

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