Association Sends Letter to NCUA Staff Members

The letter sent to the National Credit Union Administration (NCUA) is requesting clarification and possible modification to the net long-term assets/total assets ratio calculation.

The M|DC Credit Union Association has received concerns from several member credit unions regarding the classification of commercial loans in the net long-term assets/total assets ratio. In preliminary discussions with the NCUA on the issue, the association received positive feedback.

As it stands, all commercial loans, regardless of the maturity date, are considered long-term assets under this calculation. This definition's broad nature may unnecessarily distort a credit union's interest rate risk, placing credit unions at a disadvantage to other lending institutions. More importantly, it may limit the ability to lend to members, especially at a time like the present, when they need it the most. Some information has been issued on the net long-term assets/total assets ratio in the past, but it has become apparent the information is either unclear or has not been distributed enough to answer everyone's concerns. 
 
 
Read letter Here