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NCUA agenda features NCUSIF quarterly report, mid-session budget briefing, subordinated debt proposal
The NCUA Board next week is set to issue a proposed rule related to subordinated debt and will receive its quarterly briefing on the National Credit Union Share Insurance Fund (NCUSIF) and mid-session budget briefing.
NCUSIF quarterly report
Earlier this year, the board indicated the equity ratio is not expected to fall below the threshold to require a restoration plan; however, it was predicted to fall below the level at which the NCUA can charge a premium. The association has advised the agency against a premium assessment in 2021 – as credit unions have seen significant share growth and are working to overcome challenges posed amid the pandemic – and advocated instead for additional investment authorities.
The association supports a strong NCUSIF and a NOL, which provides adequate protection to taxpayers and minimizes the potential for premium charges to credit unions.
Mid-session budget briefing
NAFCU has consistently cautioned against annual budget increases and in testimony during the 2021-2022 public hearing the association offered recommendations for cost saving measures and ways to improve overall budget efficiency.
In addition, the association recently sent a letter to the NCUA urging for the prompt scheduling of the board's customary mid-session budget review and public meeting "to fulfill the agency's commitment to financial transparency."
Proposed rule: Subordinated debt
Earlier this year, the NCUA issued a final rule permitting low-income designated credit unions (LICUs), complex credit unions, and new credit unions to issue subordinated debt for purposes of regulatory capital treatment; the rule goes into effect Jan. 1, 2022. NAFCU has long advocated for a subordinated debt rule that would allow all credit unions to grow.
The meeting, scheduled to begin next Thursday at 10 a.m. Eastern, will be available via livestream on the agency's website. NAFCU will monitor the meeting and update credit unions on the latest from the NCUA.