Feb. 15, 2013 – NAFCU is endorsing H.R. 719, legislation introduced Thursday by Reps. Peter King, R-N.Y., and Brad Sherman, D-Calif., addressing supplemental capital for credit unions.
“NAFCU thanks Reps. King and Sherman for their continued leadership on this issue and for introducing this critical bipartisan legislation,” said NAFCU President and CEO Fred Becker. “Capital reform is one of the five key points in NAFCU’s credit union regulatory relief plan, which makes access to supplemental capital a priority. We are pleased that the legislation preserves the not-for-profit structure of credit unions and ensures that ownership remains with the credit union’s members.”
King and Sherman introduced a similar bill, H.R. 3993, last Congress. The new legislation, titled the “The Capital Access for Small Businesses and Jobs Act,” proposes that non-share capital accounts:
- do not alter the cooperative nature of the credit union;
- are uninsured;
- are subordinate to all other claims against the credit union;
- 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;
- are subject to maturity limits as determined by the credit union board; and
- are offered by a credit union the NCUA Board deems to be sufficiently capitalized and well-managed.
This bill, with another 13 cosponsors at introduction, incorporates language agreed upon by NAFCU and CUNA during a meeting at NAFCU’s 2010 Congressional Caucus. The two groups wrote to NCUA Chairman Debbie Matz requesting her assistance moving the proposal forward. Both NCUA and the National Association of State Credit Union Supervisors support access to supplemental capital for credit unions.