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RBC proposal inspires innovative approaches for commenting
WASHINGTON (5/27/14)--As the window to comment on the National Credit Union Administration's risk-based capital (RBC) proposal comes to a close, a different tactic is being used by some commenters: Videos citing the concerns of credit unions.
More than 1,100 comment letters already have been received by the board, including a video from the Credit Union Association of the Dakotas (CUAD).
In the video comment letter, CUAD President/CEO Robbie Thompson talks to credit union executives from rural North and South Dakota about their numerous concerns about the impact of the RBC proposal.
On Friday, the league announced that it is "very concerned about the negative impact" the proposal would have on credit unions in their states.
"Nearly half of the credit unions in the Dakotas over $50 million in assets are exempt from the MBL cap because they have historically been agricultural lenders, and many others are low income designated credit unions," its lettere reads. "As such, the proposed rule has a disproportionately deleterious impact on them."
The NCUA's proposal would replace existing risk-based net worth requirements with new risk-weighted asset and capital requirements.  The rule would apply to federally insured "natural person" credit unions with more than $50 million in assets.

The Northwest Credit Union Association also submitted a video comment letter. Ken Olson, president/CEO of $119 million-asset Old West CU, based in John Day, Ore., expressed his concerns with the proposal in the video. 
"The endgame would mean we'd have to stop our MBL lending, and that's what we do," he said. "We've been business lending and lending for agricultural purposes for the last 60 years, and our members depend on us to find sources for funding."
Jim Phelps, vice president of advocacy for Cornerstone Credit Union League, which represents Arkansas, Oklahoma and Texas, also released a video urging credit unions to submit comments before the May 28 deadline.
"Whether you agree or don't agree with the proposal, there's no denying it has the potential to affect the entire credit union system, regardless of asset size," he said.
Dave Gunderson, chair of the California and Nevada Credit Union Leagues' Regulatory Advocacy Committee, wrote, "In my view, this is one of the most important proposals the NCUA has issued over the past couple of decades. It has the potential to severely harm the credit union industry."
In his letter to committee members, Gunderson, who is also the CEO of $710 million-asset CU of Southern California, Whittier, noted, "If we don't comment, we are essentially communicating to the NCUA that the proposed rule is fine, and its passage is of no concern to us. I recognize we all have time and resource challenges--however, I believe responding to the RBC proposal should be a top priority."
Credit Union National Association President/CEO Bill Cheney said in his weekly report Friday that comment letter submissions have increased tenfold over the past month, but urged all credit unions and other stakeholders who haven't yet submitted a letter to do so.
Use the resource links for the videos.

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