Section 616(c) states:
"Each appropriate Federal banking agency shall seek to make the capital standards required under this section or other provisions of Federal law for insured depository institutions countercyclical so that the amount of capital required to be maintained by an insured depository institution increases in times of economic expansion and decreases in times of economic contraction, consistent with the safety and soundness of the insured depository institution."
While this provision addresses insured depositories regulated by the Federal banking agencies, Section 216(c)(2) of the Federal Credit Union Act discusses adjustments in credit union net worth levels. The NCUA Board may adjust the net worth ratio if the Federal banking agencies change the minimum leverage ratio.
In deciding to adjust the net worth level, the NCUA Board must determine, in consultation with the federal banking agencies, that the reason for the change in the required minimum level for the leverage limit also justifies the adjustment in net worth ratios and determines that the resulting net worth ratios are sufficient to resolve the problems of insured credit unions at the least possible long-term loss to the NCUSIF.