WASHINGTON–NCUA is being urged to assess the capital framework that applies to credit unions.
America’s Credit Unions sent a letter to the agency in response to recent statements by Federal Reserve Governor Michelle Bowman as well as to actions taken by federal banking agencies that address capital relief for community banks, as the CU Daily reported here earlier.
The letter was signed by ACU Director of Innovation and Technology Andrew Morris, who called on NCUA to identify potential reforms that can be accomplished under the agency’s existing authority.
The Reforms
America’s Credit Unions’ suggested reforms include:
- Adjustments to the Complex Credit Union Leverage Ratio (CCULR)
- Amendments to the NCUA’s subordinated debt rule
- Adjustments to the Complex Credit Union threshold to account for inflation and industry growth
- Adjustments to stress test capital tiers.
‘Put to Productive Use’
“As economic conditions change, capital requirements for credit unions should adapt to ensure that industry earnings are being put to productive use, helping members, and fueling American growth rather than merely accumulating to satisfy outmoded perceptions of risk,” Morris stated in the letter.
