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NAFCU President and CEO Dan Berger reiterated that NCUA's proposed risk-based capital rule remains a significant concern for the industry and on Thursday urged its withdrawal or "major modifications" to prevent serious harm to credit unions.

"If implemented as proposed, this RBC structure would stifle growth, innovation and diversification within credit unions," Berger wrote in NAFCU's official comment letter submitted Thursday.

Berger also urged the agency to support legislative reform "to bring about a truly appropriate risk-based system for credit unions."

In the 22-page comment letter, Berger delineated the association's ongoing, serious concerns about the impacts of NCUA's proposed rule on credit union operations and services, balance sheets, and the ability to weather economic changes and provide consumers the kinds of services and products they need.

"NAFCU wants to be clear – we support an RBC system for credit unions that would reflect lower capital requirements for lower-risk credit unions and higher capital requirements for higher-risk credit unions," the NAFCU president wrote. "However, we continue to believe that Congress needs to make statutory changes to the Federal Credit Union Act … to achieve a fair system."

Berger said a fair system requires moving away from the static net-worth ratio to a system in which NCUA, like federal banking regulators, has greater flexibility in establishing capital standards for regulated institutions. "We also believe that capital reform must include access to supplemental capital for all credit unions," he wrote.

The letter notes NCUA's "drastic understatement" about the credit unions that would be negatively affected by the proposal; reiterates concerns about NCUA's legal authority to prescribe separate RBC thresholds for "well-capitalized" and "adequately capitalized" credit unions; questions (again) the agency's legal authority to require individual credit unions to hold capital above those required by statute or rulemaking; and, among other things, challenges the agency's use of a $100 million asset-size threshold as a proxy for defining what is a "complex" credit union subject to RBC.

NCUA is taking comments on its proposed rule through Monday; NAFCU is encouraging credit unions to weigh in with the agency.