Numerator
| Equity | Risk Weights | FDIC Risk Weights | Comparable |
|---|---|---|---|
| Undivided earnings | 100% | 100% | Y |
| Regular reserves | 100% | 100% | Y |
| Appropriations for non-conforming investments | 100% | 100% | Y |
| Other reserves | 100% | 100% | Y |
| Equity acquired in merger | 100% | 100% | Y |
| Net income | 100% | 100% | Y |
| Additions | Risk Weights | FDIC Risk Weights | Comparable |
|---|---|---|---|
| Allowance for credit losses | 100% (no cap) | 100% (capped) | N1 |
| Subordinated debt in accordance with §702.407 | 100% | 100% | Y |
| Section 208 assistance included in net worth as defined in §702.2 | 100% | 100% | Y |
| Deductions | Risk Weights | FDIC Risk Weights | Comparable |
|---|---|---|---|
| NCUSIF capitalization deposit | -100% | N/A | Y |
| Goodwill (less excluded goodwill) | -100%2 | -100% | Y |
| Other intangible assets (less excluded other intangible assets) | -100%2 | -100% | Y |
| Identified losses not reflected in the RBC numerator | -100% | -100% | Y |
| Mortgage servicing assets in excess of 25% of RBC numerator (carry value) | -100% | -100% | Y |
Denominator
| Cash or Deposits in Financial Institutions | Risk Weights | FDIC Risk Weights | Comparable |
|---|---|---|---|
| Cash, currency and coin, including vault, ATM, and teller cash | 0% | 0% | Y |
| Insured balances at FDIC-insured depositories or FICUs | 0% | 0% | Y |
| Uninsured balances at FDIC-insured depositories, FICUs, and balances at privately-insured CUs | 20% | 20% | Y |
| Balances due from uninsured institutions or deposits not risk-weighted 0% or 20% | 100% | 20% - 150% | N3 |
Investments
| Securities | Risk Weights | FDIC Risk Weights | Comparable |
|---|---|---|---|
| Direct unconditionally guaranteed obligations of U.S. (government, central bank, agency) | 0%4 | 0% | Y |
| Obligations of supranational entities and multilateral development banks | 0% | 0% | Y |
| Conditionally guaranteed obligations of U.S. (government, central bank, agency) | 20%5,6 | 20% | Y |
| Obligations of GSEs other than equity or preferred stock | 20%5,6 | 20% | Y |
| Securities issued by PSEs that represent general obligation securities | 20% | 20% | Y |
| Part 703-compliant securities holding only 0% or 20% risk weight investments | 20% | 7 | Y |
| Securities issued by PSEs in the U.S. that represent revenue obligation securities | 50%6 | 50% | Y |
| Other non-U.S. government agency or non-GSE guaranteed RMBS | 50%5,6 | 8 | Y |
| Industrial development bonds | 100% | 100% | Y |
| Interest-only MBS strips | 100% | 100% | Y |
| Part 703-compliant investment securities | 100%7 | N/A | N/A |
| Corporate debentures and commercial paper | 100% | 100% | Y |
| GSE equity exposure or preferred stock | 100% | 100% | Y |
| Non-subordinated tranche of any investment security | 100%8 | N/A | Y |
| Publicly-traded equity investments (non-CUSO) | 100% or 300% | 300% | Y |
| Investment securities not compliant with Part 703 | 300%7 | 7 | Y |
| Subordinated tranche of any investment security | 1,250%8 | 8 | Y |
| Other Investments | Risk Weights | FDIC Risk Weights | Comparable |
|---|---|---|---|
| Federal Reserve Bank stock and Central Liquidity Facility stock | 0% | 0% | Y |
| Part 703-compliant funds holding only 0% or 20% risk weight investments (non-security) | 20% | 7 | Y |
| Federal Home Loan Bank stock | 20% | 20% | Y |
| Part 703-compliant investment funds (non-security) | 100%7 | N/A | N/A |
| Corporate non-perpetual capital (membership capital) | 100% | N/A | N/A |
| Charitable donation accounts | 100% | 100% | Y |
| Corporate perpetual capital (paid-in capital) | 100%9 or 150% | N/A | N/A |
| Equity investments in CUSOs | 150% | N/A | N/A |
| Investment funds not compliant with Part 703 (non-security) | 300%7 | 7 | Y |
| Non-publicly traded equity investment (non-CUSO) | 100% or 400% | 400% | Y |
| Subordinated tranche of any investment fund (non-security) | 1,250%8 | 8 | Y |
| Non-security beneficial interests (includes CEIO equity tranche of securitization) | 1,250% | 10 | Y11 |
Loans
| First Liens | Risk Weights | FDIC Risk Weights | Comparable |
|---|---|---|---|
| Current 1st-lien residential real estate loans < 35% of assets | 50%12 | 50% | Y |
| Current 1st-lien residential real estate loans > 35% of assets | 75%12 | 50% | N13 |
| Non-current 1st-lien residential real estate | 100% | 100% | Y |
| Junior Liens | Risk Weights | FDIC Risk Weights | Comparable |
|---|---|---|---|
| Current junior real estate loans < 20% of assets | 100%12 | 100% | Y |
| Current junior real estate loans > 20% of assets | 150%12 | 100% | N13 |
| Non-current junior real estate loans | 150% | N/A | N13 |
| Consumer Loans | Risk Weights | FDIC Risk Weights | Comparable |
|---|---|---|---|
| Share-secured loans (deposits held in-house) | 0% | 0% | Y |
| Share-secured loans (deposits held in another financial institution) | 20% | 20% | Y |
| Government-guaranteed portion of loan balances | 20% | 20% | Y |
| Current secured, non-guaranteed consumer loans | 75% | 100% | N14 |
| Current unsecured, non-guaranteed consumer loans | 100% | 100% | Y |
| Non-current consumer loans | 150% | 150% | Y |
| Commercial Loans | Risk Weights | FDIC Risk Weights | Comparable |
|---|---|---|---|
| Paycheck Protection Program loans | 0% | 0% | Y |
| Commercial loan balances secured by compensating balances | 20% | N/A | N/A |
| Current commercial loans < 50% of assets | 100%15 | 100% - 150%16 | Y |
| Current commercial loans > 50% of assets | 150%15 | 100% - 150%16 | N13 |
| Non-current commercial loans | 150% | 150% | Y |
Other Assets
| Denominator Deductions | Risk Weights | FDIC Risk Weights | Comparable |
|---|---|---|---|
| NCUSIF capitalization deposit | 0%17 | N/A | N/A |
| Goodwill | 0%17 | 0% | Y |
| Other intangible assets (excludes mortgage servicing assets) | 0%17 | 0% | Y |
| Mortgage servicing assets in excess of 25% of RBC numerator (carry value) | 0%17 | 0% | Y |
| Other Assets | Risk Weights | FDIC Risk Weights | Comparable |
|---|---|---|---|
| Loans to CUSOs (unconsolidated only) | 100% | 100% | Y |
| General account permanent insurance | 100% | 100% | Y |
| All other assets listed on the statement of financial condition without a specified risk | 100% | 100% | Y |
| Equity investments in CUSOs (unconsolidated only) | 100%18 or 150% | 100% - 600% | N19 |
| Mortgage servicing assets up to 25% of RBC numerator (carry value) | 250% | 250% | Y |
| Separate account insurance | 300%20 | 20 | Y |
| Subordinated tranche of any investment classified as other assets | 1,250%21 | 21 | Y |
Off-Balance Sheet Exposures
| Loans Transferred | Credit Conversion Factors / Risk Weights | FDIC Credit Conversion Factors / Risk Weights | Comparable |
|---|---|---|---|
| 1st-lien residential real estate loans transferred with recourse | 100% / 50% | 100% / 50% | Y |
| Junior-lien real estate, commercial loans, and all other unsecured loans transferred with recourse | 100% / 100% | 100% / 100% | Y |
| All other secured consumer loans transferred with recourse | 100% / 75% | 100% / 100% | N22 |
| Loans transferred to FHLB under the Mortgage Partnership Finance Program | 20% / 50% | N/A | N/A |
| Commitments | Credit Conversion Factors / Risk Weights | FDIC Credit Conversion Factors / Risk Weights | Comparable |
|---|---|---|---|
| Conditionally cancelable unfunded commercial loan commitments | 50% / 100% | 20%-50% / 100%23 | Y |
| Conditionally cancelable unfunded 1st-lien residential real estate loan commitments | 10% / 50% | 0%-50% / 50%23 | Y |
| Conditionally cancelable unfunded junior-lien real estate loan commitments | 10% / 100% | 0%-50% / 100%23 | Y |
| Conditionally cancelable unfunded secured consumer loans | 10% / 75% | 0% / 100%23 | Y |
| Conditionally cancelable unfunded unsecured consumer loans | 10% / 100% | 0% / 100%23 | Y |
| Other Off-Balance Sheet Exposures | Credit Conversion Factors / Risk Weights | FDIC Credit Conversion Factors / Risk Weights | Comparable |
|---|---|---|---|
| Financial standby letters of credit | 100% / 100% | 100% / 100% | Y |
| Forward agreements that are not derivative contracts | 100% / 100% | 100% / 100% | Y |
| Sold credit protection through guarantees | 100% / 100% | 100% / 100% | Y |
| Sold credit protection through credit derivatives | 100%24 | 100%24 | Y |
| Off-balance sheet securitization exposures | 100% / 100% or Gross-up or 1,250% | 100% / 1,250% or SSFA or Gross-up | Y |
| Off-balance sheet securities borrowing/lending and repurchase transactions | 100% / 100%24 | 100% / 100%24 | Y |
| Other off-balance sheet exposures not listed (meeting definition of commitments) | 100% / 100% | N/A | N/A |
| Over-the-counter or centrally-cleared derivatives | 25 | 25 | Y |
Footnotes
1 FDIC caps allowance for credit losses at 1.25% of risk-weighted assets.
2 Special handling for allowing goodwill and other intangibles related to supervisory mergers incurred prior to 2015.
3 FDIC uses country risk classifications and NCUA uses a simplified approach of 100% for all deposits in non-FDIC insured banks.
4 Exclude detached security coupons and ex-coupon securities.
5 Exclude interest only.
6 Non-subordinated.
7 FDIC is subject to look-through approach; NCUA has option of using the look-through approach.
8 FDIC is subject to gross-up or simplified supervisory formula approach (SSFA); NCUA has option of using gross-up approach.
9 Subject to the non-significant equity exposure measure.
10 Simplified approach used due to limited securitization activity by credit unions.
11 FDIC subtracts CEIO exposure in the numerator; NCUA addresses CEIO exposure in the denominator. The effect to the RBC ratio is comparable.
12 Includes 1- to 4-family, non-owner occupied real estate loans.
13 NCUA takes a more conservative approach for loans that have historically caused greater losses to the NCUSIF.
14 Secured consumer loans have lower credit risk than unsecured consumer loans and therefore a lower risk weight.
15 Excludes 1- to 4-family, non-owner occupied 1st- or junior-lien real estate loans and any loans secured by a personal use vehicle.
16 FDIC identifies certain loans as High Volatility Commercial Real Estate and assigns a 150% risk weight.
17 Deducted from the RBC numerator.
18 Subject to the non-significant equity exposure measure.
19 Specific to credit unions.
20 FDIC is subject to look-through approach; NCUA has option of using the look-through approach.
21 FDIC is subject to gross-up or simplified supervisory formula approach (SSFA); NCUA has option of using gross-up approach.
22 Secured consumer loans have lower credit risk than unsecured consumer loans and therefore a lower risk weight.
23 CCF is 20% if loan commitment is conditionally cancelable within 1 year and 50% if conditionally cancelable beyond 1 year.
24 Alternatively, as defined by 12 CFR 324.
25 Risk weight determined by factors such as product type, maturity, and collateral type.