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Federal Register / Vol. 86, No. 155 / Monday, August 16, 2021 / Proposed Rules not intend to limit this calculation to the seven percent net worth ratio. First, section 107A was enacted in the same legislation as section 216. Thus, Congress was aware that section 216c1A set a seven percent net worth ratio to be well capitalized. Yet in section 107Aa, rather than specifying that the MBL limitation is determined by the amount of net worth required to achieve a seven percent net worth ratio, Congress provided more broadly that the limitation is determined by reference to the minimum net worth required under section 216c1A.
Second, Congress could have limited this calculation to the seven percent net worth ratio by providing that the MBL
limitation is determined by reference only to the minimum net worth required under section 216c1Ai, which would have excluded the risk-based net worth requirement. Instead, section 107A points to section 216c1A, which encompasses both applicable net worth requirements for complex credit unions.
The Board acknowledges that the Senate Report associated with the legislation that enacted sections 107A
and 216 refers to the MBL limitation as being based on the seven percent net worth ratio in a parenthetical statement.
A statement by an individual Senator also refers to the limitation as being determined by the seven percent net worth ratio.92 But this discussion in the Senate Report is brief and does not touch upon the risk-based net worth 92 S.

Rep. No. 105193 May 21, 1998, at 5, 10,
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requirement or explain how the Senate believed the MBL limitation should work for complex credit unions, which are subject to additional net worth requirements. In any event, this general discussion does not expressly contradict the language and structure of sections 107A and 216, which the Board finds to be better indicators of the meaning and purpose of these provisions.
Applying this approach to the proposed CCULR framework, the Board proposes that for qualifying complex credit unions opting into the CCULR
framework, such credit unions may calculate a different limitation on MBLs from what they do currently under the seven percent net worth ratio. This is because, as discussed previously in the Legal Authority section, the CCULR is considered a risk-based net worth requirement, and thus falls under section 216c1Aii as a measure of the minimum net worth required to be well capitalized. Accordingly, under the proposed rule, a qualifying complex credit union that opts into the CCULR
would determine its MBL limitation by reference to the amount of net worth required to be well capitalized under the CCULR. Complex credit unions that do not qualify or do not opt into the CCULR would determine their MBL
limitation by reference to the 10 percent risk-based capital ratio, as described in the 2016 MBL final rule, quoted previously. In either scenario, if a complex credit union has actual net worth below those measures, its actual net worth would determine its MBL
limitation.

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2. Capital Adequacy Under the 2015 Final Rule, a complex credit union must have a process for assessing its overall capital adequacy in relation to its risk profile and a comprehensive written strategy for maintaining an appropriate level of capital.93 While a qualifying complex credit union opting into the CCULR
framework, is required to have a comprehensive written strategy for maintaining an appropriate level of capital, such strategy may be straightforward and minimally state how the credit union intends to comply with the CCULR framework, including minimum capital requirements and qualifying criteria. In contrast, complex credit unions that do not opt into the CCULR framework will be required to have a more detailed written strategy.
The NCUA intends to review the written strategies during the supervisory process.
L. Illustrative Reporting Forms To Support the CCULR
The NCUA intends to separately seek comment on the proposed changes to the Call Report for complex, qualifying credit unions that elect to use the CCULR framework. Chart 1, provided below, is an example of what the CCULR election form may look like in the Call report. Details supporting lines 2 through 6 can be found in section B
of this proposed rule.
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CFR 702.101b2 effective Jan. 1, 2022.

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