The National Credit Union Administration issued a Notice of Proposed Rulemaking to revise and replace the agency’s current risk-based capital requirements for credit unions with assets greater than $50 million.
The proposed rule includes implementation of a new method for computing the risk-based capital ratio that is more consistent with the approach used by the other banking agencies. It also includes revised risk weights for many asset classifications and a higher capital requirement for credit unions with concentrations of assets in real estate loans or member business loans. The effective date of these changes is projected to occur 12 to 18 months after NCUA issues the final rule.
The calculations below provide a comparison of your credit union’s current and new risk-based capital ratio and Prompt Corrective Action classification under the proposed rule. The data used in these calculations is the most recent validated 5300 Call Report. The following calculations are for informational purposes only. NCUA will not use the proposed rule calculations to determine credit union supervision.
You can access the Federal Register notice and more details about the proposed rule here.
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Net Worth Ratio:
Less than 2%
Risk-Based Capital Ratio:
N/A
No conditions.
Net Worth Ratio:
2% to 3.99%
Risk-Based Capital Ratio:
N/A
Or if "undercapitalized" at less than 5% net worth and fails to timely submit or materially implement a net worth restoration plan.
Net Worth Ratio:
4% to 5.99%
Risk-Based Capital Ratio:
Less than 8%
Must pass both net worth ratio and risk-based capital ratio.
Net Worth Ratio:
6% to 6.99%
Risk-Based Capital Ratio:
8% to 10.49%
Must pass both net worth ratio and risk-based capital ratio.
Net Worth Ratio:
7% or above
Risk-Based Capital Ratio:
10.5% or above
Must pass both net worth ratio and risk-based capital ratio.
View details to see more about calculating the proposed risk-based capital ratio.