Newsroom
NAFCU offers recommendations to NCUA regarding CCULR proposal
NAFCU Senior Counsel for Research and Policy Andrew Morris wrote to the NCUA Friday regarding the agency’s proposal to adopt a complex credit union leverage ratio (CCULR) as an alternative measure of risk-based capital (RBC) adequacy. The CCULR rule was initially introduced through an advance notice of proposed rulemaking in July. NAFCU has previously requested changes to the agency’s 2015 RBC rule, which will take effect in 2022.
In the letter, Morris highlights concerns with the adoption of CCULR, stating that with a significantly higher leverage ratio compared to the Community Bank Leverage Ratio (CBLR), the rule will only provide marginal relief to qualifying complex credit unions. Morris also recommends the NCUA reevaluate its handling of certain risks under the RBC rule.
“NAFCU appreciates the NCUA’s willingness to explore simplification of risk-based capital requirements and we are pleased that certain recommendations, such as focusing near-term attention on the CCULR (versus the Risk Based Leverage Ratio), using a simple net worth calculation, and avoiding asset-based eligibility criteria, have informed the scope of the current proposal,” wrote Morris. “While these changes are positive, they are overshadowed significantly by the decision to propose a CCULR ratio that is excessively high relative to the CBLR.”
“The character of credit union capital, resiliency of the credit union system through the pandemic, and conduct of the industry relative to banks in the period before the Great Recession, are all signs that risk within the credit union system has been and continues to be well managed,” Morris continued. “The CCULR should reflect these historical lessons and important distinctions.”
Morris continued the letter by recommending several changes to ensure the CCULR offers meaningful capital relief for credit unions, including:
- lowering the CCULR ratio to no more than 9 percent;
- eliminating restrictive eligibility criteria;
- offering a more gradual transition to a fully phased-in CCULR ratio;
- a more flexible opt-out framework for credit unions; and more./li>
“NAFCU appreciates the opportunity to comment on the NCUA’s proposed CCULR and amendments to the 2015 RBC Rule,” Morris concluded.
Read the full letter here. The association will continue to work closely with the NCUA to ensure credit unions have the resources, guidance, and flexibility needed to effectively serve their members as recovery from the coronavirus pandemic ends and into the future.
Share This
Related Resources
Add to Calendar 2024-06-26 14:00:00 2024-06-26 14:00:00 Gallagher Executive Compensation and Benefits Survey About the Webinar The webinar will share trends in executive pay increases, annual bonuses, and nonqualified benefit plans. Learn how to use the data charts as well as make this data actionable in order to improve your retention strategy. You’ll hear directly from the survey project manager on how to maximize the data points to gain a competitive edge in the market. Key findings on: Total compensation by asset size Nonqualified benefit plans Bonus targets and metrics Prerequisites Demographics Board expenses Watch On-Demand Web NAFCU digital@nafcu.org America/New_York public
Gallagher Executive Compensation and Benefits Survey
preferred partner
Gallagher
Webinar
Add to Calendar 2024-06-21 09:00:00 2024-06-21 09:00:00 2024 Mid-Year Fraud Review Listen On: Key Takeaways: [01:16] Check fraud continues to be rampant across the country. Card fraud is affecting everyone. [04:31] Counterfeit US passport cards are just another new toolbox in the bad actors’ toolbox. [07:21] Blocking the fallback is the only way to defeat counterfeit cards. [11:17] The best way is constant education to your members in as many channels as you can. [13:02] We are still seeing overdraft lawsuits. Make sure the programming you have at your credit union matches what you have displayed for the members. Web NAFCU digital@nafcu.org America/New_York public
2024 Mid-Year Fraud Review
Strategy & Growth, Consumer Lending
preferred partner
Allied Solutions
Podcast
Add to Calendar 2024-06-21 09:00:00 2024-06-21 09:00:00 The Evolving Role of the CISO in Credit Unions Listen On: Key Takeaways: [01:30] Being able to properly implement risk management decisions, especially in the cyber age we live in, is incredibly important so CISOs have a lot of challenges here. [02:27] Having a leader who can really communicate cyber risks and understand how ready that institution is to deal with cyber events is incredibly important. [05:36] We need to be talking about risk openly. We need to be documenting and really understanding what remediating risk looks like and how you do that strategically. [16:38] Governance, risk, compliance, and adherence to regulatory controls are all being looked at much more closely. You are also seeing other technology that is coming into the fold directly responsible for helping CISOs navigate those waters. [18:28] The reaction from the governing bodies is directly related to the needs of the position. They’re trying to help make sure that we are positioned in a way that gets us the most possibility of success, maturing our postures and protecting the institutions. Web NAFCU digital@nafcu.org America/New_York public
The Evolving Role of the CISO in Credit Unions
preferred partner
DefenseStorm
Podcast
Get daily updates.
Subscribe to NAFCU today.