WASHINGTON-NCUA Chairman Dennis Dollar took the opportunity to present his risk-based Prompt Corrective Action idea during his regulatory relief testimony the House Financial Institutions and Consumer Credit Subcommittee on March 27. During questioning from credit union supporter Congressman Brad Sherman (D-Calif.), Dollar was given the opportunity to float his idea of risk-based PCA on the Hill. He offered the agency's help in reexamining PCA. Sherman asked Dollar and NASCUS Chair Jerrie Lattimore, who also testified, if lowering the PCA thresholds 1% to be in line with other financial institutions would be helpful. Lattimore responded that it would be helpful in reaching the percentages, but creating a cushion through a secondary capital option would be more useful in retaining more capital. Sherman and Congressman Bob Ney (R-Ohio) introduced an amendment last year to the reg relief bill to include a secondary capital provision in the bill. The amendment was withdrawn before it could be voted on. Dollar also testified that NCUA supported most of the provisions in the current Financial Services Regulatory Relief Act (H.R. 1375) and saw no safety and soundness concerns. However, Dollar did note the agency's concern with the regulatory authority imposed on NCUA to oversee privately insured credit unions joining the Federal Home Loan Bank System. "NCUA has no legal authority, regulatory or supervisory jurisdiction over these non-federally insured credit unions or commercial insurance companies, nor do we seek it. In our view, the language requiring private insurance providers to submit copies of their annual audit reports to NCUA should be considered for being removed to avoid potential consumer confusion and misunderstanding," Dollar explained. He recommended the Federal Trade Commission as a more appropriate regulator because of its authority granted in the Federal Deposit Insurance Corporation Improvement Act to oversee consumer disclosures regarding deposit insurance coverage. The chairman also suggested that NCUA be delegated more authority in setting credit union service organization investment levels and other investment options. In general, Dollar commented, "The review and relief sought in this proposed legislation is both needed and timely." [email protected]