Urging NCUA to make capital relief changes
In a letter to NCUA Chairman Kyle Hauptman, America’s Credit Unions urged the agency to assess the capital framework that applies to credit unions. The request follows recent statements by Federal Reserve Governor Michelle Bowman and actions taken by federal banking agencies that address capital relief for community banks.
Director of Innovation and Technology Andrew Morris urged the NCUA to identify potential reforms that can be accomplished under the agency’s existing authority. These 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; and
- Adjustments to stress test capital tiers.
“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,” wrote Morris.
