NCUA official seal NCUA official seal. (Source: NCUA)

When it was adopted in 2015, the NCUA board viewed its Risk-Based Capital Rule as a much-needed step to avoid drains on the Share Insurance Fund caused by “outlier” credit unions making bad decisions.

“The overarching intent is to reduce the likelihood of high-risk outliers among complex credit unions exhausting their capital and causing systemic losses—which, by law, all federally insured credit unions would have to pay through the National Credit Union Share Insurance Fund,” agency staff said, in a memo prepared for the October 2015 meeting, when the final rule was approved.

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David Baumann

 

Credit Union Times

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