1. Bill Hampel Chief Policy Officer
RBC2, CUNA’s Priorities for Credit Unions, and Change in Impact from RBC1
Bill Hampel Chief Policy Officer

2. CUNA’s Priorities to Fix RBC1
Eliminate or reduce the 10.5% risk-based requirement to be well capitalized.
RBC2: Lowered to 10%
Reduce the risk weights, especially for MBL and mortgage concentrations, MSRs and CUSOs.
RBC2: Substantial reductions, especially in concentrations.

3. CUNA’s Priorities to Fix RBC1
Remove the treatment of interest-rate risk from the RBC system.
RBC2: Investment risk weights no longer vary by WAL. However . . .
Include the NCUSIF 1% deposit and goodwill in RBC numerator.
RBC2: NCUSIF deposit not included, supervisory goodwill counts until 2025.

4. CUNA’s Priorities to Fix RBC1
Remove the provision that would permit NCUA (examiners?) to require more capital than called for under RBC system.
RBC2: Provision eliminated, however . . .
Reduce the number of covered (“complex”) credit unions
RBC2: Asset size increased from $50 million to $100 million, reducing impact by ~800 CUs.

5. CUNA’s Priorities to Fix RBC1
Allow more time for implementation.
RBC2: Implementation extended from 18 months to ~ three years from final rule.

6. CUNA’s Summary of Impact
Includes credit unions with assets over $80 million, to allow for four years of growth.
Uses latest call report data: September 2014.

7. Comparing Capital Classifications September 2014
CUs > $40 mil
CUs > $80 mil
Existing
RBC1
RBC2
Well Capitalized
2,440
2,277
1,673
1,662
Adequately Capitalized 27
188 15 29
Under Capitalized 17 19 8 5
Total
2,484
1,696

8. RBC1 vs. RBC2 RBC1 RBC2 Risk Assets / Total Assets
Credit Union Average
68.5%
57.5%
Group Average
70.3
58.6%
Risk-Based Capital Ratio
16.2%
19.6%
15.0%
18.1%
RBC Rules for Well Cap’d
1,374 CUs
213 CUs
$ Amount by which RBC Rules
$6.4 billion
$632 million
CUs Downgraded by RBC
160
14 CUs
Cap to Regain Well Cap’d
$340 million
$48 million