Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Restrictive capital requirements combined with the inability to raise secondary capital has left even well-managed CUs completely defenseless to the first-lien the system has on their capital. (Restrictions include asset-risk weighting and the minimum requirement that is 40% higher than banks). The NCUA has the statutory authority via the deposit insurance fund to use every credit union’s entire net worth to pay for problems in the system. While the trade association proposal to allow for secondary capital is an attempt at a solution, the practical reality is that in current form, the risks outweigh any remote benefit. Meanwhile, risk to current capital is looming.

Peter Westerman

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2019 ALM Media Properties, LLC. All Rights Reserved.