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Bill Allows CUs ‘Appropriate Ability’ to Raise Supp Cap
Friday, March 10, 2017 6:45 AM

Credit Union National Association President/CEO Jim Nussle wrote Tuesday in support of a bill that would allow credit unions to accept supplemental capital. The Capital Access for Small Businesses and Jobs Act (H.R. 1244) was introduced by Reps. Steve King (R-Iowa) and Brad Sherman (D-Calif.).

Nussle wrote, “This legislation would improve a credit union's ability to maintain safety and soundness by allowing them to develop a supplemental cushion which ultimately reduces risk to the National Credit Union Share Insurance Fund.”

Specifically, H.R. 1244 would:

  • Allow credit unions to accept other forms of capital, provided it does not alter the cooperative ownership structure of credit unions;
  • Requires this capital to uninsured and subordinate to other claims against the credit union; and
  • Authorizes the NCUA to set maturity limits on this capital and restrict the ability to raise supplemental capital to credit unions which are sufficiently capitalized and well managed.

The NCUA recently put forth an Advance Notice of Proposed Rulemaking (ANPR) regarding the use of alternate capital. Comments will be accepted through May 9, and CUNA urges credit union stakeholders to provide feedback.