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Supplemental Capital

As we learned in the financial crisis, capital is king. But credit unions have restrictions on sources of capital. The only thing that counts as capital for a credit union is retained earnings. Even though the credit union system is well capitalized, allowing credit unions to access supplemental forms of capital would be a safety and soundness tool acting as a buffer to absorb operating losses and asset write-downs during economic downturns.
Congress should enact the Capital Access for Small Businesses and Jobs Act (H.R. 719), which would modify the definition of credit union net worth to include supplemental forms of capital for credit unions and allow the regulator to develop risk based capital standards for the purposes of prompt corrective action (PCA).

Supplemental Capital Talking Points
One page document outlining the major arguments regarding housing finance reform.

Risk Based Capital Proposal – Capitol Hill Talking Points
A three page document outlining the NCUA’s new risk based capital proposal. It contains questions and answers including credit unions’ concerns with the proposal and information on how supplemental capital is a necessary tool for credit unions in order to maintain capitalization requirements.

CUNA Comment Letter to the NCUA Regarding the Risk-Based Capital Proposed Rule - Bill Cheney (05.28.14)
CUNA’s official comment letter regarding concerns with the NCUA’s proposed Prompt Corrective Action–Risk-Based Capital regulation

Congressional Letters to Chairman Matz on the NCUA's Risk Based Capital Proposal
Letters from Members of Congress to Chairman Matz regarding concerns with the NCUA’s risk-based capital proposed rule.

Chairman Matz Response to Congressional Comment Letter on Risk-Based Capital Proposed Rule
Chairman Matz response to the King-Meeks comment letter expressing the concerns of 324 members of the House of Representatives

Congressional Letters to Banking Regulators on Basel Capital Rules for Small Banks
This spreadsheet displays each legislator who wrote in on behalf of community banks in support of altering Basel. This is a resource for leagues when writing their members on altering the NCUA risk based capital rule.

Dear Colleague Letter from Rep. Peter King (R-NY) and Rep. Brad Sherman (D-CA)
Letter from Rep. King and Rep. Sherman inviting other Members of Congress to co-sponsor H.R. 719.

CUNA's Supplemental Capital White Paper
An extensive review of supplemental capital and why credit unions view it as a vital tool for the growth of their member services.

H.R. 719: The Capital Access for Small Businesses and Jobs Act
Legislative language for The Capital Access for Small Business and Jobs Act introduced on February 14, 2013.

Supplemental Capital Fact Sheet
Fact sheet by the Coalition for Credit Union Access on the need for H.R. 719

The Credit Union Deposit Dilemma
Diagram explaining how H.R. 719 would give NCUA the authority to determine when supplemental capital can be included with retained earnings in the net worth ratio.

Letter from NCUA Chairman Debbie Matz to House Financial Services Committee Chairman Spencer Bachus Regarding the Need for Credit Union Capital Reform
Letter urging Chairman Bachus to pass legislation that would reverse the disincentive to accept new share deposits within credit unions.

Letter from Bill Cheney to Representative Peter King and Representative Brad Sherman in support of Supplemental Capital Legislation
Letter from Bill Cheney commending Rep. King and Rep. Sherman for introducing the Capital Access for Small Business and Jobs Act.

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