HIGHLIGHTS
FEBRUARY 2014 NUMBER 2 WWW.NCUA.GOV
STAY CONNECTED
WITH WWW.NCUA.GOV
Like NCUA
at www.facebook.com/NCUAgov
Subscribe to NCUA
at www.youtube.com/ncuachannel
Follow NCUA
at www.twitter.com/thencua
Sign up for NCUA Express delivery
at www.ncua.gov/Pages/ncuaexpress.aspx
2 Chairman’s Corner
Exams Are A
Two-Way Street
3 Get Ready. Military and
America Saves Week Is
Feb. 24–March 1
4 Board Perspectives
Teddy, Moses
and Buford
It’s Never Too Early
to Stop Being Late
5 Board Actions
Final Derivatives
Rule Approved
7 Long-Term Investments
Resulting in Increased
Supervisory Actions
8 Frequently Asked
Questions About Mergers
11 Get a Better Understanding
of NCUA’s Capital
Adequacy Rule with
Our Online Calculator
12 OSCUI Workshop and
CEO Bootcamp Schedule
Office of Examination and Insurance Report
RISKIER CREDIT UNIONS WILL NEED MORE CAPITAL
UNDER PROPOSED CAPITAL ADEQUACY RULE
CONTINUED ON PAGE 6
The 3 percent of federally insured credit
unions that take higher risks would be
required to either reduce those risks or hold
more capital under a proposed rule on risk-based capital requirements approved by the
NCUA Board.
The proposed rule, which revises the agency’s
Prompt Corrective Action regulations (Part
702), would modernize NCUA’s existing
capital measurements and provide greater
protection for the credit union industry. The
proposed risk-based capital requirements
also would be more consistent with NCUA’s
risk-based capital measure for corporate
credit unions and the regulatory measures
used by other federal financial institutions
regulators in the wake of the financial crisis.
Under the proposed formula, 94 percent of
credit unions would still be considered well-capitalized. Credit unions with less than $50
million in assets are excluded from the
proposed rule.
“We have learned that our 15-year-old
minimum standard can be improved to
better protect the industry,” NCUA Board
Chairman Debbie Matz said. “This
modernized regulation would allow NCUA
In particular, the proposed rule would:
n Revise the risk weights for many of
NCUA’s current asset classifications.
n Require higher minimum levels of capital
for federally insured credit unions with
relatively high concentrations of assets in
real estate loans, member business loans,
delinquent loans, long-term investments,
and other risky assets.
