NCUA held its Summit on Credit Union Capital on Oct. 19, where according to NCUA Chairman JoAnn Johnson, “All issues relating to capital for America’s credit unions [would] be on the table.” Here is Credit Union Journal's online account of the meeting:
ALEXANDRIA, Va. (10/20/04) -- Representatives of the leading credit union groups agreed Tuesday that NCUA should push ahead with its efforts to enact a risk-based capital system for credit unions, but agreement on the issue of secondary capital remained illusive. CUNA, NAFCU and NASCUS representatives all told NCUA ... that NCUA's proposed risk-based system would positively supplant the current net capital requirements known as prompt corrective action by providing a greater reserve cushion and freeing up more capital for other purposes. But NASCUS, which represents both state-chartered credit unions and state regulators, was the only one of the three to express unqualified support to allowing credit unions to issue secondary capital and to count it as net worth under PCA. The consensus of the groups speaking Tuesday was that credit unions currently have adequate reserves of capital, but could be limited in raising new capital in the event of a systemic crisis. The summit was organized by NCUA Chairman JoAnn Johnson in an effort to give focus to the credit union's lobbying efforts in Congress on capital.
Since capital has already been a pretty popular topic on CUES Skybox (read “Too Much Net Worth: The Elephant in the Kitchen” and its many comments), let’s open it up for discussion here: What do you think about risk-based capital? Click on “Comments” below to join the discussion! You can also e-mail individual comments to NCUA at regcomments@ncua.gov. CUES Skybox skybox@cues.org
