CHICAGO — NCUA Board Chairman Debbie Matz said Thursday shewould allow a second comment period on the proposed risk-based capital rule, but only if the law requires it.

“We are doing a top to bottom review, and if after we dothat review and look at our proposed changes … if under theAdministrative Procedure Act, we determine that we are required tobecause we have made significant changes to the intent of the reg,we will,” Matz said during the agency's Listening Session.

“But, if we determine that these are changes consistent withwhat we have proposed and it's just really more of a fine tuning and we arenot required to re-propose it, we probably will not,” sheadded.

“Maybe the law shouldn't be the governing thing, maybe it shouldbe what's right for the credit unions,” a credit union executivesaid to applause from the audience of approximately 160.

“You may have a perspective about running a credit union and Ithink you all do a fine job of running your credit unions, butyou're not standing in our shoes as regulators. And you're not heldaccountable for the safety and soundness of the system,” Matzresponded.

When asked again later in the event for a second comment period, Matz repeated a similaranswer, adding that she has attended more meetings with members ofCongress on the risk-based capital proposal than she can count.

Matz also pointed out that the agency has been working on theproposal for more than two years.

“If we don't feel we need to put (a second comment period) outto comply with the APA, and because we have been working on thisfor two years – this has been two years in the making – and wedon't want to lose more time on doing something we feel isessential to the safety and soundness of the future of the systemgoing forward, then we will not do that,” Matz said.

Board Member Michael Fryzel, who will soon leave the board butattended the event in his hometown of Chicago, disagreed.

“I personally see no reason why it shouldn't be out for a 30 or45 day period, maximum, for them to look at it again andre-comment,” Fryzel said after the Listening Session.“The issue here is to get this done right for the industry and forthe regulator and taking a little extra time is not going to makeany difference in the world. We are not in crisis mode.”

Dave Larson, president/CEO of the $1.7 billion Affinity PlusCredit Union in Saint Paul, Minn., told CU Times the NCUAshould offer credit unions a chance to comment again before therule is finalized.

“As a cooperative system, I think we need as much cooperation aswe can have and if there's going to be significant changes fromwhat's already been proposed, I think we should have an opportunityto have more commentary on what those changes are,” Larsonsaid.

NAFCU Regulatory Affairs Counsel P.J. Hoffman agreed.

“This rule is so important that it affects every part of acredit union's business model. A second comment period makes sense.You want to get this right,” Hoffman said.

“It's very hard and expensive to get it right after the rule isfinalized. You want to get this right the first time,” headded.

During the Listening Session, another executive said the NCUA ispushing credit unions back 20 years with its risk-based capitalproposal.

“You're looking at it on a micro level. You are actuallycreating concentration risk,” he said.

In response, Matz said the agency is required to put out arule on risk-based capital.

“The GAO told us we must do that,” she said. “Our own inspectorgeneral told us that we must do it.”

NCUA Director of Examination and Insurance Larry Fazio said theagency has to make sure the credit unions taking risks are holdingenough capital.

“We're trying to say you can take more risk but if it doesn'twork out, you need to have the ability to pay for it,” Faziosaid.

In her closing remarks, Matz said, “We are not trying to putanyone out of business.”

In an interview following the event, NCUA Board Member RickMetsger told CU Times some credit unions have forgottenabout the current risk-based capital system during the debate overthe agency's proposed rule.

“We actually have it [risk-based capital] now. No one's reallytalked about it because they have to do their own calculation andunless they are in trouble they do not hear from us,” Metsgersaid.