NAFCU calls on NCUA to swiftly provide risk-based net worth relief

NAFCU’s Andrew Morris offered the association’s full support for the NCUA’s proposed rule to amend its risk-based net worth (RBNW) requirement as the relief provided by it “will enable credit unions to better prioritize service to members and support lending activities.”

“The need for capital relief cannot be overstated, even as the country begins to surmount the worst effects of the COVID-19 pandemic,” wrote Morris, NAFCU’s senior counsel for research and policy. “The entire credit union industry has been working tirelessly to fuel the engine of economic recovery with new loans, forbearances, and other accommodations to address the hardships faced by members who have lost jobs or experienced strains on household finances for the past year. The intensity of this member-focused activity has coincided with increased pressure on net worth and risk based net worth ratios resulting from an elevated savings rate and influx of government stimulus.”

The agency’s proposal would define a complex credit union for purposes of the current RBNW requirement as a credit union with quarter-end assets that exceed $500 million and a RBNW requirement that exceeds six percent in advance of the 2022 effective date of the final risk-based capital (RBC) rule.

 

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