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| NCUA should consider Additional Relief actions for Credit Unions |
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Ahead of NCUA Chairman Kyle Hauptman’s scheduled testimony before the Senate Banking Committee today, America’s Credit Unions outlined ways NCUA can provide relief to credit unions. Hauptman’s testimony begins at 10 a.m. Eastern, along with other federal financial regulators.
The letter calls on NCUA to:
• Pursue targeted capital relief for credit unions to match the November proposals from banking regulators, including:
o Lower the Complex Credit Union Leverage Ratio to 8% (from the current 9%);
o Modernize its subordinated debt rule to make this source of loss-absorbing capital more usable;
o Update the “complex credit union” asset threshold and stress-test tiers to reflect inflation and industry growth; and
o Consider narrowly tailored legislative options, such as adjusting the Federal Credit Union Act’s fixed-dollar definition of a “new credit union.”
• Pursue meaningful regulatory relief that supports new charter formation;
• Clarify exactly what custodians of stablecoins or stablecoin reserves may do with those funds beyond general safekeeping;
Align with recent federal financial regulatory examination reforms by modernizing examination scope and frequency, and clarifying the standards for “unsafe or unsound practices;” and formal examination findings.
• Consider working through the Federal Financial Institutions Examination Council (FFIEC) to modernize the CAMELS rating system, with a particular focus on the “M” (Management) component.
The letter also noted America’s Credit Unions’ ongoing support for NCUA’s decision to eliminate reputation risk from the exam process.
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