Removing Barriers Blog

Representatives King and Sherman Send Letter of Support for Supplemental Capital
Posted May 10,2017 by CUNA Advocacy

CUNA thanks Representatives Peter King and Brad Sherman for sending a comment letter to Gerald Poliquin, the NCUA’s Secretary of the Board.  In their letter they highlight the need for allowing credit unions to accept supplemental capital for risk-based capital purposes. 

Representatives King and Sherman also introduced legislation, H.R. 1244 – the Capital Access for Small Business and Jobs Act, which would make the necessary statuary change to allow credit unions to accept supplemental capital for net worth purposes.  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. 

Prior to yesterday’s deadline, CUNA filed its comment letter urging the NCUA to adopt a rule allowing credit unions to accept supplemental capital instruments to count towards the risk-based net worth requirements.   

CUNA greatly appreciates the work done by Representatives King and Sherman and will continue to work with the NCUA as it moves forward to the proposed rule stage of the process.