NCUA Board Proposes Leverage Ratio For Complex Credit Unions

The National Credit Union Administration ("NCUA") board proposed a rule that would establish a simplified method of measuring capital adequacy for credit unions classified as complex (those with over $500 million in total assets).

The proposed rule would update the NCUA's October 2015 risk-based capital final rule, "including addressing asset securitizations issued by credit unions, clarifying the treatment of off-balance sheet exposures, deducting certain mortgage servicing assets from a complex credit union's risk-based capital numerator, updating several derivative-related definitions, and clarifying the definition of a consumer loan."

Under the proposed rule (which the NCUA board states is based on the principles of the community bank leverage ratio framework established in a final rule from the federal banking agencies in 2019), a complex credit union would be eligible to opt into the complex credit union leverage ratio ("CCULR") framework, if it (i)