Two league presidents have written letters to their representatives in the U.S. Congress to support H.R. 2769, informally called the stop and study bill. The legislation would direct the NCUA to re-evaluate its proposed RBC rule, justify its merits and explain the agency’s authority to impose the capital requirement on credit unions.

In a June 22 letter, Patrick LaPine, president/CEO of the League of Southeastern Credit Unions and Affiliates, wrote a letter on behalf of 152 member cooperatives of the Florida Credit Union Association, to U.S. Rep. Bill Posey, (R-Fla.), a co-sponsor of the bill.

“Asking the NCUA to take a step back and do more research on the necessity of this type of rule is not only prudent, but necessary,” LaPine wrote. “At a time when the economy has been turning for the better, imposing new rules that would make it more difficult for Americans to receive access to capital can negatively impact that turn around. Further, credit unions continue to operate safely and soundly and see no need for additional regulatory requirements that will increase an ever-growing burden.”

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On behalf of the California and Nevada credit unions, Diane R. Dykstra, president/CEO of the California and Nevada Credit Union Leagues, wrote a letter that supported H.R. 2769 to U.S. Reps Stephen Fincher (R-Tenn.), and Dennis Heck, (D-Wash.), who are also co-sponsors of the bill.

“However, imposing a drastic new form of risk-based capital without proper consideration for the nation’s credit unions could have catastrophic consequences on the system,” Dykstra wrote in her June 25 letter. “The NCUA received over 1,900 comment letters in their initial proposal and over 2,100 on the revised version. The proper time and consideration needs to be afforded given the loud outcry from the credit union system. Your proposed assessment can only lead to a more productive and positive outcome for this all involved in this process.”

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 trade groups have different views about H.R. 2769.

While CUNA officially and publicly supported the bill, President/CEO Jim Nussle expressed doubts the stop and study bill would be effective, according to the contents of a confidential email from him to league executives 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 the June 18 email. “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.”

NAFCU strongly supports the stop and study bill, calling it a crucial element of giving RBC2 the scrutiny it deserves.

“Frankly, credit unions should not have to wait for the NCUA’s second risk-based capital proposal to be finalized to seek legislative relief from the agency’s attempt at regulatory overreach that will cost them hundreds of millions of dollars,” Carrie Hunt, NAFCU’s senior vice president of government affairs and general counsel, wrote in an June 17 opinion article for CU Times. “Simply put, credit unions cannot afford to ‘wait and see.’”

On Capitol Hill, sometimes the situation just isn't that simple, Ryan Donovan, chief advocacy officer for CUNA, said.

“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. “

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