In his letter, McWatters said that based on call reports filed at the end of last year, 30 complex credit unions would fall below the new risk-based capital threshold of 10% to be considered a well-capitalized credit union.

McWatters said that the NCUA Share Insurance Fund is much stronger now than it was in 2015, when the agency passed the RBC rule. He said the equity ratio of the fund was 1.29% in 2015, when the rule was passed. As of the end of February 2018, the equity ratio stands at 1.46%.

When the RBC rule was adopted, Democrats controlled the agency board. At the time, House Financial Services Chairman Jeb Hensarling (R-Texas) had asked the agency not to adopt the rule and was angry when his request was ignored.

McWatters is a former Hensarling aide.

Meanwhile, the legislation has re-ignited the feud between bank and credit union trade groups.

The American Bankers Association has asked House members to reject any delay of the rule.

“These rules should not be delayed, both because doing so places the taxpayer-backed insurance fund at risk for losses, and because it places banks – who already have a competitive inequity because of the taxpayer subsidy provided to the credit union industry – in an unequal position in the marketplace,” James Ballentine, the American Bankers Association's executive vice president for congressional relations and political affairs, said in a memo to members of the House Financial Services Committee.

Ballentine quoted Metsger's warnings in his memo to committee members.

He said that banks have lived for more robust capital rules for years.

And he said there may be a hidden motive to the rule delay. He said that the NCUA board may have three new members in the near future, adding that would provide credit unions with a “backdoor way to eliminate these rules entirely.”

NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt disputed the ABA's arguments.

In a memo to Posey, Hunt said that the delay would give credit unions the same amount of time that banks had to prepare with their new capital standards. And she added that credit unions will have robust capital standards in place even without the new standards.

She added that it is disappointing that the ABA would attack credit unions for seeking a “modicum of regulatory relief” at the same time banks are seeking relief under the Volcker Rule.

CUNA President/CEO Jim Nussle applauded the House action to delay the rule, saying that CUNA questions whether the agency has the legal authority to impose such standards.