With a letter from U.S. Senator Claire McCaskill (D), all ten of Missouri’s U.S. Senators and Representatives have now shared concerns about the National Credit Union Administration’s (NCUA) Risk-Based Capital (RBC) proposal.
Senator McCaskill sent her letter on July 23, pointing out that 79 percent of Missouri credit unions that would be covered by the current proposal would see their capital positions shrink.
“There is concern that the new risk weights are not set at appropriate levels to best reflect the risks present in the market. These new calculations will result in a downgrade of 79 percent of Missouri credit unions covered by these new rules. With this drastic impact, credit unions should have confidence that these numbers were achieved through careful study. I urge NCUA to conduct further examination of the risk weights applied to each form of capital to ensure they are appropriate,” states McCaskill in her letter.
Senator McCaskill also raised concerns with the implementation period and urged NCUA to give credit unions sufficient time to adjust to the new RBC framework.
“These new rules are a significant development, and I encourage NCUA to work closely with credit unions and allow sufficient opportunity for feedback on these proposals,” concludes McCaskill. Click here to see McCaskill’s letter.
The RBC proposal directly affects credit unions with $50 million or more in assets, and potentially affects credit unions with $40 million or more in assets due to expected growth. In its comment letter to NCUA, the Missouri Credit Union Association (MCUA) calculated that out of the 42 credit unions covered and potentially affected by the current proposal, 33 would see a negative impact to capital if implemented as written. MCUA shared its NCUA comment letter with Missouri members of Congress.
In addition to U.S. Senator McCaskill’s letter, U.S. Senator Roy Blunt (R) shared a letter with NCUA citing concerns with the RBC proposal, and all eight U.S. Representatives from Missouri signed a joint letter from 324 members of Congress to the NCUA.
“To have all ten of our U.S. Senators and Representatives weigh in on the Risk-Based Capital proposal brings significant reinforcement to what credit unions are sharing with our regulator,” says MCUA President/CEO Don Cohenour. “We are extremely appreciative to the Missouri federal delegation for their understanding about the potential negative impact to Missouri credit unions and credit unions across the country, and their willingness to share those concerns with the NCUA.”