ABA Letter to NCUA on Simplification of Risk Based Capital Requirements

Ms. Melane Conyers Ausbrooks
Secretary of the Board
National Credit Union Administration
1775 Duke Street
Alexandria, Virginia 22314–3428

Dear Ms. Conyers Ausbrooks:

The American Bankers Association (ABA) appreciates the opportunity to respond to the advance notice of proposed rulemaking (Proposal) from the National Credit Union Administration (NCUA) to simplify NCUA’s current risk-based capital ratio requirement for “complex” insured credit unions. This requirement was adopted in its current form in 2015, with amendments in 2018, but will not become effective, because of various NCUA-initiated delays, until January 1, 2022. The Proposal invites consideration of two new, alternative approaches to implementation of the statutorily required risk-based net worth requirement for complex credit unions. As discussed below, neither suggested approach fully and appropriately implements the requirement for a risk-based net worth calculation generally comparable to that applicable to banks insured by the Federal Deposit Insurance Corporation. Achieving such comparability, however, should be straightforward in light of insured banks’ extensive history with risk-based capital standards.

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