One thing all agree on is that RBC2 still raises significant concern for credit unions. The concern has as much to do with the standard's necessity as to how the NCUA has written and plans to administer the rule, according to Henry Wirz, CEO of the $2.2 billion SAFE Credit Union in North Highlands, Calif.

"Risk-based capital is a concern because it has never been made clear why it is necessary," Wirz said. "I see it as a better way to fine tune the amount of capital required based on the composition of the balance sheet, but the NCUA proposal was flawed because the agency assigned very high capital weights to assets."

Based on approximately 2,000 comment letters filed in opposition to the NCUA's first RBC rule, changes were made to ease up on some of its standards.

Although moving in the right direction, RBC2 still poses a threat to credit unions, according to Alicia Nealon, NAFCU's director of regulatory affairs.

"NAFCU opposes RBC2 and urges its complete withdrawal," Nealon said. "The NCUA's proposal misses the mark, and will only impose more regulatory burden on an already extremely well-capitalized industry. As a result, NAFCU views H.R. 2769 as crucial because a change as big as RBC2 deserves maximum scrutiny from both the NCUA and Congress."

RBC2 still poses a threat to the credit union industry because it will stifle growth, innovation and diversification within the credit union movement, Nealon explained. Despite the fact that a limited number of credit unions would be affected by the current proposal, RBC2 could have dire consequences for the entire industry.

"NAFCU has spoken individually with many of our members who are genuinely concerned that RBC2 will inhibit their credit unions' ability to continue to engage in sound business practices and provide much needed financial products and services to their members and communities at large," Nealon said.

NAFCU's strident stance will be matched with equally strident steps, Nealon explained.

In addition to lobbying the regulator, the trade group also will encourage its members to make their opinions known to their congressional representatives, asking them to support H.R. 2769 and require NCUA to justify its position.

"NAFCU will continue to advocate for the credit union industry and urge NCUA to withdraw this proposal," Nealon added.

CUNA's approach to the so-called stop and study bill was more measured given other issues before Congress at this time, according to the contents of a confidential email from CUNA President/CEO Jim Nussle to league executives that was obtained by CU Times.

"When the RBC2 proposal was issued earlier this year, we gave a lot of consideration to pursuing a legislative strategy and concluded that the second round of the rulemaking was not the best time to engage Congress," Nussle wrote in his June 18 missive. "We concluded at that time that the challenges facing legislation with broad congressional support are significant, making the prospect of enacting a bill like this remote, particularly before the rule is final."

From a strategic perspective, Nussle continued, a legislative effort like a stop and study bill seemed unlikely to positively impact the final rule and may impede progress CUNA has been making on other matters.

CUNA instead urged credit unions to continue to comment on the issue while the trade group sought to engage the agency in ongoing discussions about the proposed rule.

Read more: Nussle questioned the cost of the bill to the NCUA …

When U.S. Reps. Stephen Fincher (R-Tenn.), Bill Posey (R-Fla.), and Denny Heck (D-Wash.) introduced H.R. 2769 last month, Nussle said CUNA conducted a similar evaluation, Nussle wrote.

"We considered once again how a legislative strategy at this time might impact the rule, and came away with largely the same conclusion: It's not likely to have a positive impact on the final outcome," Nussle's email said. "Further, it would likely distract from our efforts on 1-4, CFPB reform, data security, NCUA budget transparency, privacy notification and other issues that have a chance for real progress during this Congress."

Nussle also questioned the cost involved in having the NCUA re-evaluate its own RBC rule with the hope that the agency might arrive at a different conclusion.

But in the mind of some observers, the old adage of being penny-wise and pound-foolish came to mind.

"I find it amusing that CUNA is worried about the additional cost of a study," Jim Blaine, president/CEO of $31 billion State Employees Credit Union in Raleigh, N.C., said. "Their lack of aggressive support is costing all credit unions far, far more."

Hesitating over needless small costs was not Blaine's only concern. The credit union chief executive took CUNA to task in the June 22 edition of his blog Jim Blaine on Credit Unions for not being more proactive in light of the new legislation.

"H.R. 2769 – a simple bill asking that the NCUA document why a risk-based capital rule is necessary, if the rule is legal, and what the full impact and consequences of the rule will be on credit unions, their member-owners and the U.S. economy," Blaine wrote. "Who could have a problem with that?"

He continued, "Well evidently CUNA does! Although NAFCU has come out strongly and decisively in support of this 'stop and study' proposal, CUNA is dithering, chewing its cud, doing a little wishy-washy."

CUNA said it officially supports the bill, as well as efforts to revoke RBC2, but sometimes the situation just isn't that simple, according to Ryan Donovan, chief advocacy officer for CUNA.

Both NAFCU and CUNA agree RBC2 is a solution in search of a problem and ultimately will be detrimental to credit unions if passed, but the end result may be best determined by the right approach.

"In Congressional engagement, you get only so many bites of the apple, and we took a pretty big bite the first time around," Donovan said. "The question becomes just how many bites of the apple you can take, and we want to save that until after the proposal has been finalized."

CUNA will continue to actively lobby on behalf of revocation, or at least greater moderation in however the next phase of the process manifests, Donovan said. But the threat to credit unions still remains.

"What I know as a lobbyist is that RBC2 is causing credit union executives and volunteers considerable amounts of concern," Donovan said. "The language in the bill does not require the NCUA to take actions, but it sends a significant message to the agency that Congress has significant concerns with this proposal and expects that concern to continue. "

Some credit union leaders, including Wirz, favor risk based parameters that don't penalize a few credit unions with the excuse of protecting the many. However those parameters should be redrawn to provide greater strengthening of the movement.

"CUNA and NAFCU should lobby to have credit unions adopt a risk based capital formula similar to that used by banks so that the credit union capital standard is the same as banks with the same level of risk," Wirz said. "Capital is, in my view, a lagging indicator, but is the accepted standard for safety and soundness."

There are others, such as Blaine, who believe the infighting over RBC and its variations sends a message to Congress and the general public of the inherent weakness in the credit union regulatory structure. Those messages could lead to even greater difficulties in the years to come.

"The most disturbing consequence of the RBC process has been that we have ended up with a regulator which appears incompetent, trade association leadership which appears ineffectual, and credit unions which appear inept," Blaine said. "RBC has made us all appear to be losers, and that's not a promising sign for the future of the credit union movement."