Even though the Risk-Based Capital Rule 2.0 (RBC 2.0) has been watered-down, it is not good for the industry. Don’t forget a key component of the RBC 2.0 is NCUA’s consideration of adding a separate interest rate risk (IRR) component to risk-based capital. Standardizing IRR, assumptions, and/or approaches to assumptions, guarantees that the unique risk […]
If RBC 2.0 passes as written, each credit union defined as complex will be required to quantify their unique risks and maintain adequate capital to back those risks, all of which is to be supported by a written strategy. Excerpt from proposed RBC 2.0, §702.101 (b) Capital Adequacy: “(1) Notwithstanding the minimum requirements in this […]
As the first round of NCUA supervisory stress tests are being completed, NCUA’s capital planning and stress testing rule for the largest credit unions might have you asking if you should be doing capital planning and stress testing too. Even if you are not a federally insured credit union with assets of $10 billion or […]
Since last week’s blog post, we have received many requests for our response to NCUA’s Risk-Based Capital Proposed Rule. As a result, we have made our final response readily available on our website. One of our objectives in writing this response is to point out that prudent risk management is too complex to be reduced […]
The deadline for responses to the NCUA’s Risk-Based Capital Proposed Rule is quickly approaching and we are working hard on our response. We have our draft response available – if you are interested in reading it, please contact us.