Friday, February 13, 2015

NCUA Should Keep the Individual Minimum Capital Requirement

In its re-proposed risk-based capital requirement rule, the National Credit Union Administration (NCUA) Board removed the individual minimum capital requirement that was in the original version of its risk-based capital proposal.

However, the elimination of the individual minimum capital requirement is at odds with the position of other federal banking regulators.

Bank regulators have the discretion to require a bank to hold an amount of regulatory capital greater than otherwise required under its capital rules if a bank regulator determines that the institution’s capital requirements under its capital rules are not commensurate with the institution’s credit, market, operational, or other risks.

In my opinion, the removal of the individual minimum capital requirement is a mistake.

The individual minimum capital requirement provides a better approach to address all the risks that may confront a credit union. It is clearly superior to the watered down concentration risk weights in the re-issued proposal.


  1. Brother Keith,

    You have become mischievous in your retirement!

    You need to go on out to that beautiful N.C. beach you now call home and sip a brew, get in the water, swim around a bit, relax. You're still way too wound up!

    Would usually caution you that this is the season when the big sharks are migrating down the seaboard for the winter, but not worried about you.

    It's pretty clear from the post that you already don't have a leg to stand on...

  2. NCUA already has plenty of regulatory discretion to deal with Credit Unions engaging in high risk activities without letting examiners set arbitrary minimum capital levels

  3. Brother Keith,

    Would like to correct a typo in my prior comment on this post.

    It should have read:

    "It's pretty clear from the post that you already do not have a "leggett" to stand on..."

    Thank you.



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