§ 702.101 - Capital measures, capital adequacy, effective date of classification, and notice to NCUA.

§ 702.101 Measures and Capital measures, capital adequacy, effective date of net worth classification.

Cross Reference

Link to an amendment published at 86 FR 72804, Dec. 23, 2021.

classification, and notice to NCUA.

(a) Net worth Capital measures. For purposes of this part, a credit union must determine its net worth category capital classification at the end of each calendar quarter using two the following measures:

(1) The net worth ratio as defined in § 702.2(g); and

(2) If determined to be applicable under § 702.103, a either the risk-based net worth requirement.

(b) Effective date of net worth

capital ratio under § 702.104(a) through (c) or the CCULR framework under § 702.104(d).

(b) Capital adequacy.

(1) Notwithstanding the minimum requirements in this part, a credit union defined as complex must maintain capital commensurate with the level and nature of all risks to which the institution is exposed.

(2) A credit union defined as complex must have 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.

(c) Effective date of capital classification. For purposes of this part, the effective date of a federally insured credit union's

net worth category

capital classification shall be the most recent to occur of:

(1) Quarter-end effective date. The last day of the calendar month following the end of the calendar quarter;

or

(2) Corrected

net worth category

capital classification. The date the credit union received subsequent written notice from NCUA or, if

State

state-chartered, from the appropriate

State

state official, of a decline in

net worth category

capital classification due to correction of an error or misstatement in the credit union's most recent Call Report; or

(3) Reclassification to lower category. The date the credit union received written notice from NCUA or, if

State

state-chartered, the appropriate

State

state official, of reclassification on safety and soundness grounds as provided under § 702.102(b) or § 702.

302

202(d).

(

c

d) Notice to NCUA by filing Call Report.

(1) Other than by filing a Call Report, a federally insured credit union need not notify the NCUA Board of a change in its

net worth ratio

capital measures that places the credit union in a lower

net worth

capital category;

(2) Failure to timely file a Call Report as required under this section in no way alters the effective date of a change in

net worth

capital classification under

this

paragraph (b) of this section, or the affected credit union's corresponding legal obligations under this part.

[65 80 FR 858466706, FebOct. 18, 2000; 65 FR 55439, Sept. 14, 2000, 29, 2015, as amended at 67 86 FR 1246472804, MarDec. 19, 2002; 67 FR 71087, Nov. 29, 200223, 2021]