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The NCUA Board on Thursday released for a 90-day comment period its revised risk-based capital proposal, but NAFCU maintains the proposal still would be too costly for credit unions and could threaten some institutions.

The new proposal retains some elements of last year's RBC proposal. For example, there would remain two separate classifications for "well-capitalized" and "adequately capitalized" credit unions, and concentration risk is unchanged. As strongly urged by NAFCU, the individual minimum capital requirement has been removed; NCUA says it will rely on other supervisory authorities to address deficiencies in capital levels.

NAFCU also urged a lengthy implementation period. Under today's draft rule, the new requirements would take effect Jan. 1, 2019. This is more than twice the amount of implementation time provided in last year's proposal.

In another NAFCU-sought change, NCUA has removed interest-rate risk from its proposed asset risk weights. The proposed risk weight for investments in credit union service organizations is now 150 percent, down from last year's proposed 250 percent.

The asset-size threshold for exemption from the RBC rule also would rise from $50 million in assets to $100 million, but NAFCU still has concerns with NCUA's continued plan to define a "complex" credit union for RBC purposes solely based on asset size.

NCUA is estimating that this rule would cost credit unions more than $5 million for "policy review and revision" alone.

Supplemental capital still is not addressed in this proposed rule.

NAFCU President and CEO Dan Berger credited NCUA for its work and for hearing concerns raised on this issue, but he said NAFCU's concerns have not abated.

"We thank the NCUA Board for its leadership and NCUA's staff for their hard work on the agency's second risk-based capital proposal. We appreciate the agency addressing several of the key issues, including the risk weighting and implementation period, raised by NAFCU, credit unions and lawmakers," said Berger. "However, we believe this rulemaking is unnecessary. The costs associated with it are shocking given how extremely well-capitalized the industry is today. The huge costs of this proposal, which attempts to address just a few dozen credit unions, reinforces our position that this rule is not necessary and, quite frankly, was never necessary.

"We believe that risk in credit union operations can be addressed on a case-by-case basis. NAFCU is commencing a detailed review of this proposed rule, and we will work with our members to provide NCUA detailed feedback. Any final risk-based capital rule must leave credit unions the ability and flexibility they need to serve their members and thrive."

He added, "NAFCU will continue to do whatever it takes, both at the regulatory agency and on the Hill, to ensure that a fair, risk-based capital system is established for credit unions."

NAFCU is preparing a Regulatory Alert seeking members' input on the proposed rule as well as an FAQ document and a calculator that lets individual credit unions conduct scenario analyses of the proposal's impact. Carrie Hunt, NAFCU's senior vice president of government affairs and general counsel, will provide an overview in a video to be released in the near future.

Watch NAFCU Today for ongoing developments.