NAFCU supports the idea of a risk-based capital regime for credit unions, but NCUA’s proposed rule “is one-size-fits-all and would serve to stifle growth, innovation and diversification,” association President and CEO Dan Berger said in a comment letter submitted Monday.

In the letter, 35 pages in all, Berger expressed hope that upon review of credit unions’ responses, NCUA’s board “will realize the devastating effect that this proposal will have on the credit union industry, the American consumer, and our nation’s small businesses.” Meanwhile, he urged that the agency either withdraw its proposed rule or make major modifications before any rule is finalized.

Berger cited numerous serious concerns about the proposed rule, key among them:

• NCUA’s legal authority to issue the rule as proposed, particularly as it affects comparability with banking rules, legal terms defined by statute, the individual minimum capital requirements and the definition of a “complex” credit union;
• the need for a legislative solution in order to achieve a fair and balanced risk-based capital system;
• the need for an additional notice of proposed rulemaking with a public comment period;
• NCUA’s drastic understatement of the number of credit unions affected and whose balance sheets and business plans will need adjustment;
• NCUA’s proposed setting of a 10.5 percent risk-based capital ratio for well-capitalized credit unions;

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