Capital relief must include credit union parity with banks
America’s Credit Unions is urging lawmakers to ensure that any banking sector reforms providing capital relief are matched with comparable steps for credit unions.
In a letter to the House Financial Services Subcommittee on Financial Institutions ahead of its hearing on banking sector reform, the organization emphasized that credit unions—serving more than 144 million members nationwide—must be included in discussions about regulatory relief and capital reforms.
President/CEO Jim Nussle noted that while credit unions support strong capital requirements to protect the National Credit Union Share Insurance Fund, the requirements for credit unions should adapt to changing economic conditions 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.
The organization has outlined for the NCUA various steps that can be accomplished under the agency’s existing authority, including adjustments to the Complex Credit Union Leverage Ratio, the subordinated debt rule, stress test capital tiers, and the complex credit union threshold to reflect inflation. The group also urged legislative steps such as raising the Federal Credit Union Act’s definition of a “new credit union” to account for inflation and expanding permissible investment options.
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