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NCUA Seeking Feedback on Alternative Capital
Thursday, April 27, 2017 6:55 AM

The NCUA Board issued an advanced notice of proposed rulemaking (ANPR) to solicit comments on alternative forms of capital federally insured credit unions could use in meeting capital standards required by statute and regulation. An ANPR is an early step in the regulatory process that permits an agency to gather information from interested parties prior to issuing a proposed regulation. 

For purposes of the ANPR, alternative capital includes two different categories:

  1. Secondary capital; and
  2. Supplemental capital. 

Secondary capital is currently permissible under the Federal Credit Union Act (Act) only for low-income designated credit unions to issue and to be counted toward both the net worth ratio and the risk-based net worth requirement of NCUA's prompt corrective action standards. The board is considering changes to the secondary capital regulation for low-income designated credit unions. There are no other forms of alternative capital currently authorized. However, the board is also considering whether or not to authorize credit unions to issue supplemental capital instruments that would only count towards the risk-based net worth requirement.

Comments are due to NCUA by May 9, 2017. The ANPR can be found here.

Please copy Suzanne Yashewski, SVP Regulatory Compliance Counsel (syashewski@cornerstoneleague.coop) on any comments you have on this issue. Specifically, Suzanne would like to know:

  1. Are you interested in the NCUA pursuing a proposal for alternative capital?
  2. If yes, what would you want the proposal to look like?
  3. If you have any concerns about the proposal, what would they be?