Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

Washington
NCUA Supports CU Capital Bill
WASHINGTON (5/3/13)--The National Credit Union Administration backs a bill that would allow well-capitalized credit unions to match a growing deposit base from a growing membership with capital from sources other than retained earnings--which currently is the only type of capital that counts toward capital ratio.

Under current law, the more deposits a credit union accepts, the more its capital ratio declines. When capital ratios decline, credit unions could face prompt statute regulated corrective action by their regulator.

NCUA Chair Debbie Matz pledged in a May 2 letter to Rep. Peter King (R-N.Y.), the bill's chief sponsor along with Rep. Brad Sherman (D-Calif.), that if the U.S. Congress enacts King's Capital Access for Small Business and Jobs Act (H.R. 719), her agency will "promptly propose the necessary rule changes required for implementation."

Matz wrote, "As we witnessed during the recent economic crisis, maintaining sufficient capital is critical at time of economic stress...Your legislation would provide credit unions with an additional tool to promote sufficient capital--even under adverse economic conditions--and ensure that healthy credit unions would no longer be forced to turn away deposits in order to protect their net worth."

The Credit Union National Association strongly advocates for giving credit unions access to supplemental capital. In a recent letter, CUNA urged federal lawmakers to consider the capital concerns of credit unions as Congress discusses Basel III exemptions for small banks.

"To be clear: we would have very significant concerns if Congress were to exempt the small banks from the Basel III capital requirements and not at the same time address reforms to credit union capital requirements," CUNA President/CEO Bill Cheney urged in the letter to all members of the U.S. House.

Basel III standards would require U.S. banks to hold common equity of 4.5% by 2015. In addition, banks would be required to hold a 2.5% conservation buffer, which would be gradually introduced by 2019, and increase Tier 1 levels from 4% to 6% by 2015.

Recent House legislation (H.R. 1693) would exempt community banks from the application of Basel III capital standards.


RSS





print
News Now LiveWire
What role are #creditunions playing in @gatesfoundation's 2030 vision of financial services? Read #NewsNow Monday
9 hours ago
Consumers fear inaccurate info lingers on credit reports, says @FTC study Read @CUNA's News Now: http://t.co/RzNLMnaROO
11 hours ago
@PCUA has formed a @LinkedIn networking group for former bankers turned #creditunion employees.
11 hours ago
.@politico reports Democrats haven't picked the city yet, but their 2016 convention will be held the week of July 25.
11 hours ago
.@cuna, @DCUC_HQ urge @CFPB to exempt #CUs from changes to Military Lending Act rules cuz CUs aren't part of the targeted problem. NN Monday
13 hours ago