Newsroom

January 26, 2015

Hunt questions RBC costs, methods in CU trade pubs

Two editorials from NCUA touting the agency's new risk-based capital proposal drew immediate responses from NAFCU's Carrie Hunt in Credit Union Times and Credit Union Journal, in which Hunt focuses on the proposal's costs and the need for comprehensive capital reform for credit unions.

Hunt, NAFCU's senior vice president of government affairs and general counsel, said the association supports withdrawing NCUA's proposed rule and allowing Congress to address capital reform.

She was responding to opinion pieces from NCUA Office of Examination and Insurance Director Larry Fazio. In the Credit Union Times piece, Fazio pointed to the financial crisis as a key reason for NCUA's proposed rule, but Hunt calls this an "overgeneralization of a complex issue." She notes the costs of the proposed rule in new added capital needs despite the fact that far fewer credit unions than banks failed during the crisis, and she says NCUA should take its RBC debate to Capitol Hill. She gave similar advice in her response to Fazio's Credit Union Journal piece.

CU Times also ran an editorial Monday suggesting a challenge to the legality of NCUA's proposed two-tier RBC ratio is a waste of resources. NAFCU Director of Regulatory Affairs Alicia Nealon replied, "The two-tier RBC ratio we're all talking about now doesn't just raise legal questions – though it does raise them ... [it] would cost credit unions nearly half a billion dollars more than a one-tier system. That's more than pocket change."