Feb. 10, 2012 – NAFCU President and CEO Fred Becker on Thursday lauded the introduction of H.R. 3993, a bill introduced by Reps. Peter King, R-N.Y., and Brad Sherman, D-Calif., that would allow NCUA to permit certain credit unions access to supplemental capital, and he is calling on members to help generate additional cosponsors.
The bill was introduced Thursday morning after months of working with NAFCU and others in the credit union industry. Titled the Capital Access for Small Businesses and Jobs Act, the measure was offered with Reps. Ron Paul, R-Texas, Greg Meeks, D-N.Y., Larry Kissell, D-N.C., and Bob Filner, D-Calif., signed on as original cosponsors.
The language of H.R. 3993 represents the framework that had been agreed to by NAFCU's and CUNA’s Executive Committees during a meeting at NAFCU’s 2010 Congressional Caucus. It is embodied in a joint October 2010 letter signed by Becker and CUNA President and CEO Bill Cheney to NCUA Chairman Debbie Matz.
The credit union trade presidents, in that letter, point to supplemental capital as “an issue of ever-increasing importance.” They urged Matz’s “leadership and assistance in moving (the issue) expeditiously forward.”
Matz, during NAFCU’s 2011 CEOs and Senior Executive Officer Conference, called supplemental capital the agency’s No. 2 priority.
As introduced, H.R. 3993 would allow the NCUA Board to authorize non-share accounts that count toward a credit union’s net worth that meet the following criteria:
- they do not alter the cooperative nature of the credit union;
- they are uninsured;
- they are subordinate to all other claims against the credit union, including the claims of creditors, shareholders and the National Credit Union Share Insurance Fund;
- they are available to be applied to cover operating losses of the credit union in excess of its retained earnings and, to the extent so applied, will not be replenished;
- they are subject to maturity limits as determined by the NCUA Board; and
- they are offered by a credit union that is determined by the NCUA Board to be sufficiently capitalized and well-managed.
Becker wrote all U.S. House members seeking their support and cosponsorship of H.R. 3993. He is also calling on NCUA to endorse and actively support the measure.
NAFCU members are urged to begin contacting their House representatives now; materials to facilitate that are on this website.
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