League Files Comment Letter on Complex Credit Union Leverage Ratio; Risk-Based Capital

Your League will today file its comment letter on NCUA's Complex Credit Union Leverage Ratio - Risk-Based Capital proposed rule.

Read the letter

"The Virginia Credit Union League (VACUL) generally supports the objective of the Complex Credit Union Leverage Ratio (CCULR) to provide a simpler option to risk-based capital," notes the letter. "However, regardless of the methodology and calculation, VACUL does not believe credit unions should be subject to more stringent capitalization requirements than community banks.  The credit union threshold for being designated as well capitalized (10% by January 1, 2024) should be no more than the 9% requirement under the Community Bank Leverage Ratio (CBLR) framework."

We note other issues with the proposal and write that NCUA should delay enactment of the rule; revisit the proposal's opt-in framework; and reconsider its treatment of goodwill, differentiating between supervisory goodwill and  elective goodwill in all risk-based capital ratios and CCULR criteria.

We also call for parity with the Community Bank Leverage Ratio (CBLR) framework (9% requirement), after an extended transition period to account for balance sheet growth resulting from the pandemic and government stimulus spending.

Reminder: The deadline for filing comments is Oct. 15.

Related: NCUA's Proposed CCULR of 10% Too High to Help Majority of CUs