Simplification of Risk Based Capital Requirements

Simplification of Risk Based Capital Requirements

The National Credit Union Administration (NCUA) Board (Board) is issuing this advance notice of proposed rulemaking (ANPR) to solicit comments on two approaches to simplify its risk-based capital requirements. The Board's risk-based capital requirements are set forth in a final rule dated October 29, 2015, which is currently scheduled to become effective on January 1, 2022. The delayed effective date has provided the Board with additional time to evaluate the capital standards for federally insured credit unions (FICUs) that are classified as ''complex'' (those with total assets greater than $500 million). The first approach would replace the risk based capital rule with a Risk-based Leverage Ratio (RBLR) requirement, which uses relevant risk attribute thresholds to determine which complex credit unions would be required to hold additional capital (buffers). The second approach would retain the 2015 risk based capital rule but enable eligible complex FICUs to opt-in to a ''complex credit union leverage ratio'' (CCULR) framework to meet all regulatory capital requirements. The CCULR approach would be modeled on the ''Community Bank Leverage Ratio'' framework, which is available to certain banks.

On May 10th, CUNA submitted comments to the NCUA - Read the letter