New RBC rule will affect a few credit unions but protect all

first_imgAt its January 2015 meeting, NCUA’s Board voted to propose a revised risk-based capital rule, part of a broad regulatory reform effort the agency launched in response to the financial crisis. The revised proposed rule would directly affect a small number of credit unions, but its benefit will be shared by all of them.As it does with any new rulemaking, NCUA carefully weighed the benefits the rule would achieve against the potential costs to the system in terms of time and resources and the potential regulatory burden in terms of reporting and capital requirements.The benefits side of that equation is undeniable. If this proposal had been in place in 2007, losses to the National Credit Union Share Insurance Fund would have been substantially lower than the $750 million lost due to consumer credit union failures. Many of those failures might have been prevented.The agency has worked with stakeholders to keep the cost side of the equation in check. In fact, the unprecedented amount of feedback the agency received on its original RBC proposal helped identify opportunities to make our approach more targeted to outliers with outsized risk and more precise in its measurement of that risk.Scope: Expanded, but TargetedOn the whole, the credit union system is very strongly capitalized today, but there are a few outliers—credit unions that don’t hold capital commensurate with the risk in their portfolios—that pose higher risk to the Share Insurance Fund. The current RBC rule requires only two of these credit unions to hold additional capital.The revised proposed RBC rule would apply to credit unions with more than $100 million in assets, about 22 percent of all federally insured credit unions. These credit unions hold 89 percent of system assets, and are involved in one or more complex activities.Seventy-eight percent of credit unions would be exempt from any regulatory burden associated with complying with the revised proposed rule, but all credit unions will continue to comply with the existing seven percent net worth ratio requirement.Measurement: More Detailed, but More PreciseNCUA’s revised proposed rule includes risk-weight factors that have been carefully calibrated for credit unions. In most cases, NCUA’s risk weights are comparable to those developed for banks, but some are notably lower to reflect the unique make-up and performance of the credit union system. The agency has tailored risk weights in the revised proposed rule to identify credit unions that fall well outside industry norms with respect to their real estate and commercial loan concentrations.Stakeholders favored more calibrated risk weights as well, and NCUA would need to make extensive changes to the Call Report over the next several years to allow the agency to gather more granular data.Remedy: Options for Managing RiskThe revised proposal sets the risk-based capital threshold for “well-capitalized” at 10 percent instead of 10.5 percent as originally proposed. Credit unions that fall below this threshold will have options for addressing their portfolio risk to return to being “well-capitalized:”Strategically reducing risk.Holding more capital.Doing some combination of both.Based on estimates from Call Report data, only 27 credit unions would face this decision. Those that do can pick the option that best serves their interests and operations.In developing this approach, NCUA considered the need to protect the system’s safety and soundness and the importance of providing a sound framework for future growth. This approach doesn’t constrain growth; it helps credit unions manage it. The agency expects the revised proposed RBC requirements would have no adverse impact on credit union lending, as 98 percent of credit unions will remain well-capitalized under the revised proposal, holding an average risk-based capital ratio exceeding 19 percent.Protecting the safety and soundness of a $1 trillion system and positioning that system to withstand future challenges are ambitious goals that require a certain commitment. The 27 outlier credit unions that would be directly impacted by the rule tend to be credit unions with lower than average capital, but which take higher than average risks. The revised proposed RBC rule helps us meet the goal of protecting the system, and is targeted and efficient enough to control the cost. As we know, the cost of doing nothing or getting it wrong can be too great.NCUA has provided many materials to help credit unions and other stakeholders understand the impact of the revised proposed RBC rule, including a downloadable RBC Estimator that will help credit unions determine their risk-based capital ratios confidentially. These materials are available on NCUA’s Risk-Based Capital Resources page. The revised proposed rule is open for a 90-day comment period and the agency looks forward to continuing the dialogue on this important issue. 6SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Larry Fazio Larry Fazio graduated from Lewis University with a degree in Accounting. He is a Certified Management Accountant (CMA) and has a Master’s degree in Organizational Management from George Washington University…. Web: Detailslast_img read more

DENR chief Cimatu sent to Cebu City to oversee COVID-19 efforts

first_imgMANILA – Department of Environment and Natural Resources (DENR) secretary Roy Cimatu has been sent in Cebu City by President Rodrigo Duterte to oversee the implementation of measures against coronavirus disease (COVID-19) there. “I fully accept your challenge you gave. Just like the orders you gave to me before, to Boracay, we changed the cesspool image of Boracay to what it is now,” Cimatu told Duterte. “He is there as the representative of the President. The President continues to have supervisory powers over local government officials,” Roque said on Cimatu. “Hopefully, the assignment will be short as possible.”/PN Cimatu, in the same public address, has accepted the new role given to him by the Chief Executive after he was previously appointed to spearhead the cleanup of Boracay Island. In an address to the public on Monday evening, President Duterte tasked the Department of Health, Department of the Interior and Local Government and the National Task Force Against COVID-19 to assist Cimatu. President Duterte has reverted Cebu City to enhanced community quarantine until June 30 due to the increasing number of COVID-19 cases and widespread community transmission in the metropolis. “I need a person in Cebu to give him a picture of what is happening there,” the President further said. “I’m sure Sec. Cimatu can look as long as he has the support and assistance of the Cebu officials, both national and local.” Presidential spokesperson Harry Roque clarified in a virtual press conference on Tuesday that Cimatu will serve as President Duterte’s representative in Cebu City. “Kayong mga taga-Cebu, it’s not that I do not trust your capability but rather it’s the penchant to go into a sort of a sisihan tapos nobody would answer for anything,” Duterte said.last_img read more

Women of Troy tie for fifth at weekend invitational

first_imgFollowing its first tournament victory of the season, the USC women’s golf team was unable to replicate its success this weekend, finishing tied for fifth place on Sunday at the PING/ASU Invitational in Tempe, Ariz.Rival UCLA won the tournament by a commanding 12 strokes, finishing with an overall score of 5-over 857. Host Arizona State finished second at 17-over 869, while Texas A&M finished third at 21-over 873. The Women of Troy, ranked third in the nation, tied with UC Davis at 29-over 881.“The finish is disappointing, especially considering the fact that we won the last tournament,” sophomore Sophia Popov said.The team started slowly Friday, coming in tied for seventh at 289 after the first round. Senior Inah Park, who has notched two Top-16 finishes in her last three tournaments, shot par 71 to lead the Women of Troy at 13th. Rising freshman Doris Chen, coming off three consecutive Top 10 finishes, tied for 22nd at 1-over 72 with the help of two birdies on the front nine. Sophomore Sophia Popov and senior Lisa McCloskey each recorded three birdies and shot 2-over 73 to tie for 37th. Sophomore Rachel Morris tied for 69th at 6-over 77.The final two rounds proved troublesome for the Women of Troy, who were unable to crack the top 3. After slipping to 3-over 74 on the second round, McCloskey surged to 2-under 69 Sunday, finishing 10th overall at 216. Chen maintained her consistency, shooting 2-over 73 on Saturday and 1-over 72 Sunday to tie for 11th at 217.Park, who led the team after one round, struggled to maintain her standing, shooting 5-over 76 and then 8-over 79 in the final round to finish tied for 46th at 226. Morris finished tied for 73rd at 232, notching 5-over 76 on Saturday before shooting 8-over 79 in the final round.Popov, who captured her fourth individual victory during the last tournament, struggled to a 10-over 81 on the second round before finishing strongly at 2-over 73 in the final round, bringing her to 51st. The finish was disappointing for Popov, who was looking to add to her momentum from the previous tournament.The season has been rather inconsistent for the Women of Troy, who have struggled to repeat their success from last season. After winning four tournaments and receiving numerous accolades, the team has only captured one tournament victory thus far, but is still ranked high nationally and is optimistic about the end of the season.“Last tournament, we played very solid golf and didn’t give shots away. Unfortunately, we couldn’t get it done as a team, but it was good to be in the hunt and now we know what we need to work on to try and win the next one,” Popov said.The Women of Troy will be off until April 16th, when they participate in the two-day Pacific Coast Intercollegiate at Half Moon Bay. Following that, the team will gear up for the 2012 Pac-12 Championships, which will take place April 27th-29th in Pullman, Washington.last_img read more