Which risk-based calculator is your credit union using to model the impact of the RBC rule? As we have discussed previously, NCUA has made available
to the public a risk-based capital calculator, but did you know that CUNA also has a risk-based capital simulator
available to members, too? Which one should your credit union use? Both!
We suggest that you start by using NCUA’s calculator to see how the agency thinks your credit union will fare under the RBC regime imposed by the proposal. Stop immediately and write a comment letter
if NCUA’s calculator indicates that your credit union needs more capital. The next step is to use CUNA’s calculator. If CUNA’s calculator indicates that your credit union needs addition capital under the RBC proposal, then again, stop immediately and write a comment letter.
If your credit union’s capital is okay under both calculators, you should still consider the future. CUNA’s risk-based capital simulator allows for a credit union to model changes in its balance sheet and provides for the use of what-if scenarios, including how things like mortgage and member business lending may change over time.
Also keep in mind that NCUA’s rule allows an examiner to impose extra capital on a credit union whenever he or she thinks extra capital is necessary. This can be done even if a credit union is well capitalized and meets all RBC requirements. No calculator can model examiner whimsy.