ICBA told the National Credit Union Administration that credit unions should first be subject to the full provisions of the Basel III regulatory capital standards before capital relief measures are considered.

Background: The NCUA’s proposed Complex Credit Union Leverage Ratio would require 10% leverage when fully implemented in 2024. However, complex credit unions have yet to follow any risk-based capital requirements—including Basel III—until the CCULR begins to take effect next year.

Comments: In a comment letter to the NCUA, ICBA said:

  • Community banks had to follow the provisions of the standardized approach and its risk weights long before regulators instituted the Community Bank Leverage Ratio.
  • Credit unions should be required to deduct goodwill from regulatory capital calculations as an intangible asset, like community banks.
  • Credit unions that engage in riskier activities, such as member business lending, should not be allowed to use the CCULR.
  • Without sufficient capital requirements, many credit unions will find themselves unable to manage loan losses during the next economic downturn.

More: Additional information on ICBA’s credit union advocacy is available on its Wake Up page.