Newsroom

January 19, 2017

NCUA ANPR out on alternative capital for CUs

The NCUA Board on Thursday issued an advance notice of proposed rulemaking on alternative forms of capital federally insured credit unions could use to meet capital standards required by statute and regulation. The ANPR is out for a 90-day public comment period.

NAFCU Executive Vice President for Government Affairs and General Counsel Carrie Hunt welcomed the ANPR, released during the open NCUA Board meeting, and reiterated NAFCU's focus on capital requirements that help credit unions.

"NAFCU applauds NCUA Board Chairman Rick Metsger and Board Member J. Mark McWatters for their efforts to address the critical issue of alternative forms of capital," said Hunt. "NAFCU has long championed providing credit unions with more flexibility to meet capital requirements. We also continue to advocate for legislation that would create a fair capital system providing, among other things, access to additional capital for all credit unions, regardless of charter type."

NCUA is considering changes to its rule for secondary capital, which is authorized only for low-income-designated credit unions and counted toward the net worth ratio and the risk-based net worth requirement under prompt corrective action standards. It's also considering whether to authorize credit unions to issue supplemental capital instruments that would count only toward the risk-based net worth requirement.

Metsger, during the meeting, emphasized the importance of receiving input from all credit unions, not just those that might use alternative capital, on the ANPR. "These are complex and difficult issues. That is why it is important to hear from the entire credit union community," Metsger said.

McWatters urged credit unions to examine all aspects of alternative capital and its potential impacts. "Please help us understand what works in the marketplace," he said.

NCUA staff also briefed the board on the statutory inflation adjustment of the agency's civil money penalties. The board approved the adjustment by notation vote Jan. 5; an interim rule will be published in the Federal Register.