Removing Barriers Blog

CUNA Supports Proposed Changes to NCUA’s Corporate Credit Union Regulation
Posted September 01,2017 by CUNA Advocacy

Today, CUNA filed a letter of support of proposed changes to NCUA's corporate credit union regulation regarding provisions on retained earnings and Tier 1 capital. 

Specifically, we support the proposed change to incorporate "GAAP equity acquired in a merger" as a component of retained earnings, as we believe doing so will increase the transparency of a corporate's capital adequacy.

In addition, we believe the 2010 amendments to Part 704 have resulted in the intended effect. Specifically, corporates have accumulated sufficient retained earnings to meet or exceed the adequate capitalization threshold under Prompt Corrective Action through the October 2016 phase-in adjustment. Therefore, we agree with the proposal to remove the requirement effective October 2020 to limit perpetual contributed capital counted as Tier 1 capital to the amount of retained earnings.