Bankowość i finanse · 5/18/1999

Prompt Corrective Action

In 1998, Congress amended the Federal Credit Union Act to require the NCUA Board to adopt, by regulation, a system of ``prompt corrective action'' to be taken by NCUA and by federally-insured credit unions if they become undercapitalized. The new FCUA provision imposes a series of progressively more stringent restrictions and requirements indexed to five capital categories which it establishes for federally- insured credit unions. It also mandates a separate system of prompt corrective action for ``new'' credit unions and an additional risk- based net worth requirement for ``complex'' credit unions. The proposed rule combines the components of prompt corrective action which are expressly prescribed by statute (except the risk-based net worth requirement for ``complex'' credit unions) with those NCUA is responsible for developing to suit credit unions. The rule also establishes conforming reserve and dividend payment requirements, and procedures for reviewing and enforcing directives imposing prompt corrective action.