CU*Answers Publishes Second Article on NCUA’s Revised Risk Based Capital Rule

CU*Answers, a cooperative CUSO located in West Michigan, announced that is has published its second article critiquing the NCUA’s revised Risk Based Capital rule (RBC2). The article continues from part one of the three-part series by addressing the Rule from a holistic approach. “Of the three articles this is the most compelling as it cuts right to the crux of why this rule should not be passed,” said Randy Karnes, CEO of CU*Answers. “Rather than reviewing its parts, the Rule as a whole must be withdrawn as it will be detrimental to the cooperative nature of our charters.” The article goes on to criticize RBC2 for failing to address the diverse nature of credit union charters, which require diverse approaches to balance sheet composition and capital adequacy, and argues the Rule will force credit unions into a one-size-fits-all banking model. “NCUA continues to promulgate regulations as if they were the FDIC,” said Karnes. “This continues to be the number one failure of our regulator as they do not consider our cooperative nature and principles that we were founded upon. At the very least this rule should be withdrawn and potentially used as an internal tool for supervision as well as tested over an extended period of time.” The CUSO released part one of the three-part series during the first week of February to get the industry revved up again for the comment period and will conclude the series with part three on February 18. CU*Answers is also encouraging everybody in the credit union industry to make their voices heard by the NCUA, and has created a comment engine to assist in that endeavor. The three-part series and the comment engine are available from the website of the audit and compliance division of CU*Answers, AuditLink.