WFC Classic: Capital Rules and Risk Management for Credit Unions
Summary
Mark interviews Steve Farr, a former NCUA examiner and problem case officer, about credit union capital regulations. They discuss the purpose of regulatory capital, the history of the net worth ratio, and new rules like the complex credit union leverage ratio and risk-based capital. The episode also covers capital management strategies, stress testing, and the importance of internal understanding over relying solely on third-party consultants.
Topics discussed
Introduction and guest Steve Farr's background
Steve Farr's career history at NCUA and CLF
Purpose of regulatory capital and insurance fund protection
Historical context of net worth ratio and PCA
Net worth ratio details and comparison to bank standards
Complex Credit Union Leverage Ratio explained
Risk-based capital requirements and calculations
Management of capital and economic capital tools
Using third-party assistance and internal understanding
Closing remarks and contact information
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