Voglio sapere a riguardo di…

jspears on DSK121TN23PROD with RULES1

72792

Federal Register / Vol. 86, No. 244 / Thursday, December 23, 2021 / Rules and Regulations
percent. Some commenters stated that a nine percent CCULR would provide greater regulatory relief. Several commenters generally discussed that higher capital may restrict credit union growth and mean less resources to invest in products and services that benefit the member-owners. One commenter stated that a 10 percent calibration could restrict credit unions ability to expand access to the underserved and underbanked. One commenter discussed that accelerated asset growth as a result of COVID19
should favor a lower CCULR. Another commenter recommended that the Board set CCULR at less than nine percent and recommended a ratio closer to eight percent.
In contrast, one credit union commenter supported a CCULR of 10
percent. One banking trade organization generally supported sufficient capital requirements.
The Board understands the commenters concerns about a 10
percent CCULR, due in part to the recent downward pressure on credit union net worth ratios from the rapid growth in assets during 2020 and 2021.
The Board also understands that a higher capital requirement may restrict credit union ability to invest in member products and services. As the proposed rule explained, the Board initially considered setting the CCULR between 9 and 11 percent and presented analysis on the potential impact in terms of safety and soundness and burden reduction for potential CCULRs at 9 and 10 percent.
In recognition of this fact, and in response to the comments received, the Board has adopted a CCULR of nine percent and is forgoing the transition provision. The Board finds that this calibration of the CCULR will provide appropriate regulatory burden relief and serve as further incentive for complex credit unions to opt into the CCULR
with the benefit of maintaining strong capital levels in the credit union system and ensuring safety and soundness.
Guided by the goals stated in the proposed rules calibration discussion maintaining strong capital levels in the credit union system, ensuring safety and soundness, and providing appropriate regulatory relief to as many credit unions as possiblethe Board considered several factors in adopting a CCULR of nine percent.
First, the Board considered aggregate levels of capital among complex credit unions. The CCULR framework does not result in a reduction of the minimum required amount of capital held by complex credit unions and results in an overall increase in the minimum
VerDate Sep<11>2014

19:16 Dec 22, 2021

Jkt 256001

amount of required capital held by complex credit unions. Based on reported data as of June 30, 2021, approximately 70 percent of complex credit unions qualify to use the CCULR
framework and would be well capitalized under a 9 percent calibration. This was a significant decrease in the number of eligible credit unions at 9 percent when compared to pre-pandemic net worth ratios, when approximately 90 percent would have been eligible. Of the total 680 complex credit unions as of June 30, 2021, 473
have a net worth ratio greater than nine percent and would be well capitalized under a nine percent CCULR standard.
Of those 473 credit unions, the Board estimates that all of them meet the qualifying criteria, and are thus eligible to opt into the CCULR framework.
Under the CCULR, if all 473 credit unions opted into the CCULR and held the minimum nine percent net worth ratio required to be well capitalized, the total minimum net worth required is estimated at $111.8 billion, an increased capital requirement of $24.3 billion over the minimum required under the 2015
Final Rule. The Board is not aware of any qualifying complex credit unions that would reduce their capital requirement with a CCULR of nine percent as compared to the 2015 Final Rule.
The Board also considered the extent of the burden relief provided by the CCULR framework. The Board believes a CCULR of 9 percent is preferable to a CCULR of 10 percent as it permits an additional 173 complex credit unions 473 eligible at 9 percent versus 300 at 10 percent to opt-into the CCULR
framework, which supports the Boards goal of reducing regulatory burden for as many complex credit unions as possible.
Next, the Board considered that the 8
to 10 percent range established by Congress for the CBLR is 300 to 500
basis points higher than the 5 percent leverage ratio required for wellcapitalized status under the other banking agencies PCA framework.56 As detailed in the proposed rule preamble, the Board reviewed the basis for the 7
percent net worth ratio for insured credit unions and considered a range between 9 and 11 percent for the CCULR. The Boards analysis established that setting the CCULR 300
basis points higher than the seven percent net worth ratio while the other banking agencies have set the CBLR 400
basis points higher than the comparable leverage requirements for insured banks 56 12 CFR 6.4 OCC, 12 CFR 208.43 Federal Reserve Board, and 12 CFR 324.403 FDIC.

PO 00000

Frm 00014

Fmt 4700

Sfmt 4700

would be appropriate because of changes in credit union investments in corporate credit unions since Congress established the seven percent net worth ratio in 1998. But the proposed rule did not conclude that a 9 percent CCULR
would be inappropriate and specifically analyzed the merits of 9 and 10 percent in the calibration discussion.
Upon reconsideration, the Board is adopting a nine percent CCULR based on its effect on capital levels and burden reduction, rather than calibrating CCULR based on the analysis of the seven percent net worth ratio and relative difference between the CBLR
and the leverage ratio for insured banks.
The Board acknowledges, however, that setting CCULR at nine percent is only 200 basis points above the statutory well-capitalized threshold for the net worth ratio absent consideration of the reduced corporate credit union investments. The Board also recognizes it is less than the 400 basis point differential established by the other banking agencies in setting the CBLR
when compared to the leverage ratio.
The Board, however, believes a CCULR
of nine percent is prudent and does not present undue safety and soundness risk. A primary reason that other banking agencies chose a CBLR of nine percent was to ensure qualifying community banks generally maintain their current level of capital. As discussed previously, a CCULR of nine percent increases the total minimum net worth required to $111.8 billion, an increased capital requirement of $24.3
billion over the minimum required under the 2015 Final Rule. The Board also notes that the analysis in the proposed rule comparing bank and credit union net worth and leverage ratios was not a decisive factor but one of several factors forming the overall proposal, which included a nine percent CCULR in the range of consideration.
Also, as a separate point that confirms the Boards approach and conclusion, the other banking agencies also designed the CBLR framework to reduce the likelihood that a banking organization would not hold less capital under the CBLR framework than under the risk-based capital framework. The Board estimates that no qualifying complex credit union would reduce its capital requirement with a CCULR of nine percent as compared to the 2015
Final Rule. Thus, the Board does not believe a reduced CCULR of nine percent will result in the potential for regulatory arbitrage between the two frameworks.
Finally, as noted in the proposed rule preamble, the Board specifically considered comparability to the other
E:FRFM23DER1.SGM

23DER1