Heather Anderson

During the Jan. 15 NCUA board meeting, Board Member J. Mark McWatters argued that the proposed risk-based lending rule is illegal.

McWatters’ prepared remarks were so dense with legalese, I was bleeding from the ears after just a few paragraphs. Thankfully, a couple of lawyer friends dumbed it down for me: The gist of the argument was that the Federal Credit Union Act only allows for a single-tier net worth requirement.

Technically, that may be true, but pursuing a legal way out of risk-based capital is a waste of industry resources. Between the NCUA, CUNA, Callahan & Associates and others, it’s probably a low estimate the industry spent a quarter of a million dollars fighting or supporting the regulation.

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