Compliance Blog

Mar 18, 2015
Categories: Operations

NAFCU Provides Talking Points for RBC2

Written by Alicia Nealon, Director of Regulatory Affairs

With just over a month before the April 27th comment deadline for NCUA’s second risk based capital proposal (RBC2), NAFCU has put together Talking Points - a very helpful tool for our members to assist as you begin putting your comment letters together.

While NCUA addressed several key concerns raised by NAFCU, credit unions and lawmakers in this second proposal, including the risk weighting and implementation period, NAFCU still strongly believes this proposed rulemaking is unnecessary. The costs associated with it are shocking given how extremely well-capitalized the industry is today.

Simply put, the credit union industry does not need this rulemaking.  NAFCU believes RBC2 is an inappropriate use of credit union resources to address concerns about a few credit union outliers. The few-dozen credit unions NCUA says would be downgraded under the proposal would need to hold $53.6 million in capital — funds that might be used elsewhere for loans and services — to remain well-capitalized. We believe risk in credit union operations should be addressed on a case-by-case basis, and not with a broad-brush regulation.

As NCUA continues to evaluate RBC2, it is pivotal that the entire credit union industry weigh-in.  Your insight is valuable to the agency.  The thoughts and concerns you express will ultimately lead to better capital requirements for credit unions.

With that in mind, I encourage you to write a comment letter to NCUA explaining how RBC2 will affect your credit union, and the industry as a whole. To help, NAFCU has put together Talking Points for our members based on our analysis of the proposed rule.  While the Talking Points should be colored with the views and opinions of your credit union, NAFCU has listed a number of helpful arguments broken down by topic.  For example, the Talking Points detail NAFCU’s disagreement with NCUA’s interpretation of the Federal Credit Union Act to support RBC2’s two-tier RBC standard, as well as review many of RBC2’s proposed risk-weights.

NCUA needs to hear what credit unions are saying and keep capital in the marketplace instead of parked on your a balance sheets.  For our part, NAFCU is committed to doing whatever it takes — at NCUA and on the Hill — to ensure that a fair system of risk-based capital is established for credit unions.  For your part, I ask that you make your voices heard and submit a comment letter to the agency by the April 27, 2015, deadline letting NCUA know how this rulemaking is completely unnecessary. 

As you consider RBC2’s impact on your credit union, be sure to take a look at NAFCU’s Regulatory Alert 15-EA-02, our Capital Reform Issue Page, or reach out to me directly (, 703-842-2266) with your thoughts.