Risk-Based Capital Calculator
A Call to Action for Credit Union Volunteers

Editor's Note: The below post was written by Lou Gill, Secretary and Director of Chartway Federal Credit Union:

I have just completed my first letter to the NCUA.   In the past I have always let our CEO take the lead on comment letters addressing proposed regulations.  But, this Prompt Corrective Action Risk-Based Capital (RBC) proposed regulation is different.

NCUA is trying to change the way credit unions do business at a cost to our members, and needs to hear from the members they serve.   As a volunteer elected credit union official representing over 180,000 members, I have a responsibility to comment on this RBC proposed regulation because, if approved as written, it will change the future credit unions--and not for the good.

I agree, as most do, the credit union industry needs a smart and thoughtful Risk Based Capital oversight.  However, this proposed regulation is simply not it.   After reviewing NCUA’s calculator I started looking at the 198 page proposed regulation and listening to my CEO, CUNA and others in the credit union movement.  What I discovered was extremely troubling.  This proposed regulation will impede my credit union’s ability to be competitive in the marketplace in providing sound and safe member financial services.  Member/consumer lending, mortgage lending and the use of our collaborative CUSO will all be impacted.  Our credit union may be forced to reduce dividends on member shares and CDs.  Traditional ALM/ALCO strategies will be replaced with the new proposed regulatory balance sheet requirements, adversely affecting all of our products. 

Please work with your CEO and use CUNA’s website to provide NCUA your concerns and suggestions before May 28, 2014.  Your letters should be copied to your Congressional Representatives.  We need to let them know we are concerned NCUA’s proposed regulation will lead to higher cost and lower income on investments for our members, and place the future of all credit unions in question.  I am optimistic that NCUA will thoroughly review all the comment letters and embrace the suggested changes.  But, the time to act is now.

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