Risk-Based Capital, 12 CFR 702.101(b)

Amendments to 12 CFR 702 (October 29, 2015; 80 FR 66626), regarding prompt corrective action (PCA), require that credit unions taking certain risks hold capital commensurate with those risks. This final rule restructures the NCUA’s PCA regulations and makes various revisions, including amending the agency’s current risk-based net worth requirement by replacing it with a new risk-based capital requirement for complex credit unions. The risk-based capital provisions of this final rule apply only to federally insured, natural-person credit unions (credit unions) with assets greater than $100 million. Section 216(d) of the Act (12 U.S.C. 1790d (d)) addresses the risk-based net worth requirement for complex credit unions. Accordingly, §702.103 defines “complex” and the risk-based capital requirement is applicable only if the credit union’s quarter-end total assets are greater than $100 million. Section 702.101(b) requires that a credit union defined as complex has 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. The NCUA will use the information to ensure a credit union’s capital is sufficient given its risk profile.

The latest form for Risk-Based Capital, 12 CFR 702.101(b) expires 2021-08-31 and can be found here.

Capital Adequacy - Complex Credit Unions

Federal Enterprise Architecture: Economic Development - Financial Sector Oversight