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NCUA Launches Risk-Based Capital Calculator

By Heather Anderson
January 23, 2014

Fresh off the heels of its proposed risk-based capital rule, the NCUA Thursday launched a new online tool to help credit unions gauge their ability to comply.

The Risk-based Capital Calculator provides users a comprehensive overview of a credit union’s capital ratio and Prompt Corrective Action category under both the current rule and the proposed regulation, the NCUA said in a release. Those capital numbers would be visible to the public as well as credit unions.

Although the proposed rule would only apply to credit unions with assets of more than $50 million, the risk-based calculation tool is available to all federally insured credit unions. Users can search for a specific credit union by name or by charter number.

After selecting a credit union to review, users can see each component of that particular credit union’s risk-based capital ratio. Users also can click on the “formula” icon located by each individual component to see what data from the Call Report are used and how the proposed risk-weights are applied at each point in the ratio calculation.

This level of transparency will ultimately lead to a better final rule, the NCUA said.

Credit unions of all asset sizes are encouraged to utilize the calculator during their review of the proposed changes for calculating risk-based capital.

The calculator is available on the NCUA’s website; an accompanying instructional video is available on the regulator’s YouTube channel.

NCUA Launches Risk-Based Capital Calculator

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