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NAFCU Chief Economist David Carrier determined that credit unions with more than $50 million in assets will have to hold $6.3 billion more in additional reserves to achieve their current capital cushion level if NCUA's proposed rule on risk-based capital is adopted.

"This rule as proposed will have unpredictable consequence for loan and share growth, as individual credit unions will need to adjust their balance sheets to meet the new requirement," Carrier said. "Because credit unions cannot just raise capital from the open market, this cost will undoubtedly be passed on to credit union members."

Capital cushion is the difference between a credit union's net worth ratio and the minimum required to be adequately capitalized under the proposed system. Carrier calculated the capital cushion required for credit unions of different sizes as follows:

• Credit unions with assets between $50 and $100 million would need $192 million in additional reserves;
• Credit unions with assets between $100 and $250 million would need $346 million in additional reserves;
• Credit unions with assets between $250 and $500 million would need $1.05 billion in additional reserves;
• Credit unions with assets between $500 million and $1 billion would need $1.28 billion in additional reserves;
• Credit unions with assets of more than $1 billion would need $3.47 billion in additional reserves.

NAFCU has published a Regulatory Alert seeking members' input on the NCUA proposed rule, which will be out for a 90-day comment period when it is published in the Federal Register.