Legislation that would prohibit the NCUA from enforcing itsrisk-based capital rule would cost an estimated$400 million in losses over ten years to the Share Insurance Fund,the Congressional Budget Office said.

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The House Financial Services Committee has approved the bill,H.R. 4464, sponsored by Rep. Bill Posey (R-Fla.) and supported bycredit union trade groups.

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The CBO said the cost to the share insurance fund would occurbecause failed credit unions would have less capital than if therule were in effect increasing the cost to assisting thoseinstitutions.

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Taxpayers would not party the brunt of those costs since creditunions pay premiums and fees. However, CBO said that there likelywould be a lag time between needed fees and them being collected.As a result, the legislation would likely cost taxpayers some $50million over ten years, the budget office said.

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“There are great concerns about the cost of this rule on creditsunions, the legal authority of the NCUA to implement this rule andthe regulatory burden this rule will have on credit unions,” Poseysaid, as the Financial Services Committee approved the bill inDecember. “This bill will ensure that credit unions do not tie-upscarce resources that would otherwise be made available to creditunion members and our communities in the form of loans and lowerinterest rates.”

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NCUA Chairman J. Mark McWatters has expressed a willingness torevisit the rule.

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However, fellow board member Rick Metsger has said that thepotential losses at credit unions that have made loans based on thevalue of taxi medallions that have plunged in value emphasizes theneed for a strong risk-based capital rule.

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