Advocating for credit union capital relief
As the House Financial Services Committee prepares to hold a hearing on reforms today, America’s Credit Unions is urging committee members to examine ways to update credit union capital requirements as they look for ways to fuel economic growth.
A letter sent Monday outlined several reforms. Specifically, that credit unions would also benefit from the kind of relief the committee is considering for community banks. Other reforms could include the NCUA:
- Adjusting the Complex Credit Union Leverage Ratio (CCULR);
- Amending the NCUA’s subordinated debt rule;
- Adjusting the Complex Credit Union threshold to account for inflation and industry growth;
- Adjusting stress test capital tiers.
Legislative steps could also provide immediate relief to credit unions, such as raising the Federal Credit Union Act’s “new credit union” definition (tied to a fixed dollar threshold that has not been adjusted in many years), and expanding investment options afforded to federal credit unions under the Federal Credit Union Act.
The letter reiterates several rulemakings America’s Credit Unions has requested the NCUA initiate to recalibrate the capital treatment of mortgage servicing assets and residential real estate exposures under the risk-based capital framework.
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