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A trade report this week quoted NCUA Board Member J. Mark McWatters saying he would vote against issuing a final risk-based capital rule if it contained a two-tier RBC standard for well- and adequately capitalized credit unions.

The proposed rule would set different RBC ratios for the two classifications.

McWatters took issue with this aspect of the proposed rule during the agency board's January open meeting. He found fault with a legal opinion letter obtained by the agency that indicated a court "could" rule in NCUA's favor if the two-tier standard were challenged later. He cast a "no" vote on issuing the revised proposal.

McWatters was quoted in a March 2 Credit Union Times article reiterating his concerns about the two-tier standard and his view that the provision violates the Federal Credit Union Act.

"If the proposal goes to final and there's a two-tier structure in there, as there is today, then I will not support the rule," McWatters is quoted saying. He's also quoted reiterating he believes NCUA has the legal authority it needs to address supplemental capital in the final rule on risk-based capital.

"NAFCU still questions the necessity of NCUA's proposed risk-based capital rule," said Alicia Nealon, NAFCU's director of regulatory affairs. "We have serious concerns about the rule's potential impact on credit unions and the legality of its provisions, particularly the two-tier standard."

Nealon has been writing a series of blog posts in the NAFCU Compliance Blog seeking members' input on different aspects of the proposed rule.