Risk-Based Proposal No Longer A Capitol Idea

WASHINGTON (04/28/06) -- Chances of Congress enacting a risk-based capital system for credit unions continue to dwindle as the Senate Banking Committee prepares to vote on a regulatory relief bill absent the risk-based provision proposed by NCUA. "We understand the Senate bill does not include the proposals for (risk-based capital) or member business loans," said NCUA's congressional liaison John McKechnie, of a separate proposal to lift the limit on member business loans from the current 12.25% of assets. Capitol Hill sources said the Senate panel wants its version of regulatory relief to be similar to one passed by the House last month and to avoid any potential controversies, like the banker-opposed risk-based capital provision, in order to ease the way to passage. A credit union-specific bill known as the CU Regulatory Improvements Act, which does include the risk-based capital provision, is not expected to be voted on this Congress, even with more than 100 House members signing on as co-sponsors. (CU Journal)