California and Nevada's voice in Washington D.C. The Leagues are the only Leagues with a full time staff dedicated to working with Congress, Government Agencies, and Federal Regulators. The resources in this area will help you keep informed of the latest developments and credit union priorities.
State Government Advocacy efforts brings the voice of credit unions to Sacramento and Carson City. Our advocacy team works daily with elected officials, staff, the executive offices, gubernatorial appointees, and the decision-makers of California and Nevada. This area will keep you updated on all advocacy efforts at the state level of Government.
Last week, former U.S. Senator Alfonse D’Amato (1981-99, NY) wrote to the NCUA, outlining how the agency has exceeded its legal authority in proposing a two-tier risk-based standard—one for “adequately capitalized” and one for “well-capitalized” credit unions. D’Amato chaired the Senate Banking Committee during the passage of H.R. 1151, and spearheaded changes to the Federal Credit Union Act, including those on Prompt Corrective Action (PCA).
He states in the letter, “If we had intended there should also be a separate risk-based requirement to be well capitalized (in addition to the 7 percent net-worth ratio), we would have said so.”
To read D’Amato’s letter, click here.
Lawmakers Express Concern
Additionally, as of Monday evening, 324 members of Congress (of the current 432) have signed on to a letter expressing similar concerns. The final letter will be made available later this week. From the California (44 of 53) and Nevada (4 of 4) delegations, all but nine members have signed the letter.
“This is a historic moment for credit unions and Congress, as many on Capitol Hill do not recall a time when this many members of the House of Representatives supported a single issue,” said Jeremy Empol, vice president of federal government affairs for the California and Nevada Credit Union Leagues. “When Congress intervened over the implementation of BASEL III for banks, only 208 members of Congress signed that letter.”
More Comment Letters Needed
Sharon Lindeman, vice president of regulatory advocacy for the Leagues, said credit unions’ work is “far from over.” As of Monday evening, only 300 comment letters had been submitted nationwide to the NCUA—and the comment period ends May 28. Of the 300, 27 are from California and Nevada credit unions. In addition, another 25 have committed to writing a letter.
“During the banks’ struggles with BASEL III, more than 2,000 banks submitted comment letters by this point, representing roughly one-third of their industry,” Lindeman said. “Regardless of the impact on your credit union, if the industry response is nominal, the NCUA will simply dismiss the voice of credit unions.”
Under the NCUA’s proposal, a “well-capitalized” credit union would need a statutory net-worth ratio of 7 percent and a higher risk-based capital ratio of 10.5 percent of equity-to-risk assets. Congress did not intend a separate risk-based capital ratio for well-capitalized credit unions. This goes against the current Federal Credit Union Act and system of Prompt Corrective Action.
“The Leagues are asking credit unions, regardless of size and immediate impact from the rule, to speak up today,” Lindeman said.
The NCUA must hear from more credit unions by the May 28 deadline. Credit unions can visit PowerComment.org, which provides resources to understand the proposal and simplifies the letter writing process.
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