ARLINGTON, Va.—NAFCU is dialing back its original estimates on the potential costs of the second risk-based capital proposal.
NAFCU previously stated that the proposal would cost CUs $760 million, now that figure is $729 million.
“We took another review of the assumptions and felt we should be a little more conservative in the forecast,” NAFCU Director of Research and Chief Economist Curt Long told CUToday.info.
NAFCU’s financial analysis originally showed that credit unions’ capital cushions would suffer a $490-million hit with the two-tier structure, now that is $470 million. In order to satisfy the proposal’s well-capitalized thresholds, credit unions would need to raise an additional $729 million according to the new NAFCU estimates, not $760 million as previously stated.
To satisfy the proposal’s “adequately capitalized” thresholds, credit unions would need to raise an additional $260 million, not $270 million, as NAFCU previously shared.
In a recent letter to Congress, the trade association also outlined the impact the latest RBC proposal would have had on CUs had it been in place in 2009. NAFCU told Congress that 155 CUs would have been downgraded if the current proposal were in place in 2009, now that number is 45.
In the letter to Capitol Hill, NAFCU also stated that to avoid being downgraded under this second rule, had it been in place in 2009, that CUs would have had to raise $1.4 billion. The new figure is $145 million.
CUNA told CUToday.info that it projects credit unions, under the revised RBC proposal, will have to hold an additional $630 million in capital to be considered well-capitalized.
Last year CUNA and NAFCU estimated the previous risk-based capital proposal would require credit unions to hold about $7 billion in additional capital.