NCUA’s Mestger Supports Supplemental Capital Legislation, RBC Rule Changes

National Credit Union Administration Director Rick Metsger stressed balance as a key to effective regulation, particularly in the areas of capital and risk.

Speaking to the Massachusetts Credit Union League’s annual meeting and convention this week, Metsger endorsed H.R. 719, the Capital Access for Small Business and Jobs Act.  Metsger said he supports the legislation that would allow credit unions without low-income designation to access supplemental capital.

““With Congress recognizing the statutory barriers credit unions face in raising additional capital,” Metsger said, “enactment of this bill would provide a two-pronged approach to enhancing credit union capital with both regulatory and congressional action.”

He said he has directed the NCUA’s Office of Public and Congressional Affairs to continue to educate federal legislators and staff about the need for supplemental capital.

He cautioned that the legislation “is not a panacea or prerequisite for adoption of a risk-based capital rule as required by current law.”

Metsger noted some areas of the NCUA’s proposed risk-based capital rule that he feels need to be adjusted before the rule is finalized, but socialized with attendees that it “may require additional information to be collected in the Call Report.” He asked whether credit unions would be willing to accept that additional regulatory burden.  If so, areas of the rule he said require adjustment include:

  • Lengthening the phase-in period for any final rule;
  • Clarifying that only the NCUA Board, and not examiners, can raise individual credit unions’ capital requirements;
  • Adjusting the risk weights for investments in CUSOs and corporate perpetual capital;
  • Modifying the risk weight for cash at the Federal Reserve; and
  • Altering risk weights when other federal agencies have provided guarantees.

Metsger is scheduled to address the Northwest Credit Union Association’s Annual Business Meeting as part of Amplify Convention in Spokane October 7-9.  Registration is open online.

Posted in Federal, NCUA.