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Episode Summary:
In this episode of With Flying Colors, host Mark Treichel sits down with Steve Farrar, a former NCUA examiner and capital expert, to discuss the complexities of credit union capital management. With decades of experience, Steve shares insights into the evolution of capital regulations, the purpose of regulatory capital, and the challenges credit unions face in maintaining the right balance between risk and growth.

Key Takeaways:

1. Steve Farr’s Background: Steve shares his extensive career journey, from starting as an NCUA examiner in 1987 to becoming a key player in regulatory capital rulemaking.
2. Purpose of Regulatory Capital: Understand why capital is essential for credit unions, from absorbing losses to maintaining public confidence.
3. Net Worth Ratios and PCA: Dive into the history and significance of net worth ratios in ensuring credit union stability.
4. New Complex Credit Union Leverage Ratio (CCULR): Learn about the simplified capital adequacy measure introduced in 2023 and its implications for credit unions.
5. Risk-Based Capital: Explore how this tool provides credit unions with a tailored perspective on their capital adequacy.
6. Capital Management Strategies: Discover best practices for developing a capital plan that aligns with your credit union’s unique risks and opportunities.

Listener Questions:
Have questions about credit union capital or topics from today’s episode? Send them to Mark via email at [email protected] or through his website at www.marktreichel.com. Your question might be featured in a future episode!

Contact Information:
For consulting inquiries or to learn more about how Mark and Steve can assist your credit union, reach out using the above contact details.

Closing Thoughts:
This episode highlights the importance of a strategic approach to capital management. Whether you’re grappling with regulatory requirements or looking to optimize your capital structure, this conversation offers valuable guidance for credit union leaders