League Seeks Your Input on NCUA's Capital Adequacy Rule

Your League is seeking your input on NCUA's proposed rule that would provide a simplified measure of capital adequacy for federally insured credit unions more than $500 million in assets.

We invite you to provide the League with any comments or thoughts you have on this proposed rule. We would need them by Oct. 6 and ask that you email them to Cvtipilson@vacul.org.

Overview of the Proposed Rule

Capital Adequacy: The Complex Credit Union Leverage Ratio; Risk-Based Capital
Comments due: October 15, 2021

The NCUA is seeking comment on a proposed rule that would provide a simplified measure of capital adequacy for federally insured, natural-person credit unions (credit unions) classified as complex (those with total assets greater than $500 million).

Under the proposed rule, a complex credit union that maintains a minimum net worth ratio, and that meets other qualifying criteria, will be eligible to opt into the complex credit union leverage ratio (CCULR) framework. The minimum net worth ratio would initially be established at 9 percent on January 1, 2022, and be gradually increased to 10 percent by January 1, 2024. A complex credit union that opts into the CCULR framework would not be required to calculate a risk-based capital ratio under the Board's October 29, 2015, risk-based capital final rule, as amended on October 18, 2018.

A qualifying complex credit union that opts into the CCULR framework and that maintains the minimum net worth ratio would be considered well-capitalized. The proposed rule would also make several amendments to update the NCUA's October 29, 2015, risk-based capital final rule, including addressing asset securitizations issued by credit unions, clarifying the treatment of off-balance sheet exposures, deducting certain mortgage servicing assets from a complex credit union's risk-based capital numerator, updating several derivative-related definitions, and clarifying the definition of a consumer loan.

NCUA-2021-0072 RIN: 3133-AF12
Federal Register lin: https://www.govinfo.gov/content/pkg/FR-2021-08-16/pdf/2021-15965.pdf