Newsroom
NAFCU and Inlclusiv share feedback on subordinated debt rule with NCUA
In a joint letter to NCUA Secretary of the Board Melanie Conyers-Ausbrooks, NAFCU and Inclusiv, a national association for community development financial institutions (CDFIs) and low-income credit unions (LICUs), shared comments on the NCUA’s proposed amendments to its 2020 Subordinated Debt Rule.
The proposed rule would amend the definition of “grandfathered secondary capital” to include secondary capital issued to the U.S. Government or one of its subdivisions under an application approved before Jan. 1, 2022 and was proposed during the board’s September meeting.
“The proposed rule ensures that LICUs that have already submitted [Emergency Capital Investment Program (ECIP)] applications will not need to revise an accompanying secondary capital plan to conform with new procedural requirements in the Subordinated Debt Rule when ECIP investment decisions are made in 2022,” wrote the organizations. In addition, both associations noted their support for the NCUA’s, “grandfathering of secondary capital plans approved in conjunction with LICU applications.”
The proposed rule would also be instrumental in facilitating efficient deployment of ECIP funding in low-and moderate-income communities, especially those hit hardest by the pandemic. The associations wrote that the NCUA Board’s progress to move toward credit unions accepting long-term capital as a debt obligation was a promising sign.
In the letter, both associations mentioned that the parameters of the current secondary rule are more than sufficient for addressing regulatory capital treatment of ECIP investments, stating, “the ECIP, being administered exclusively by Treasury, involves a more structured type of subordinated debt offering, and the issuances contemplated by the program were developed around the requirements of the current secondary capital rule.”
Of note, NAFCU and Inclusiv did share that they do not support a maximum maturity for ECIP investments that truncates the useful life of the funding as regulatory capital, noting that it would, “ impair the impact of the funding in low- and moderate-income communities that need longer term capital infusion.”
Both associations do, however, appreciate the NCUA responsiveness to these and other concerns, as seen in the Agency’s recent Letter to Credit Unions. The associations suggested NCUA conduct a broader reevaluation of the Subordinated Debt Rule in 2022 to create a more fitted framework for the subordinated debt.
NAFCU regularly engages with NCUA to ensure credit union concerns are heard, had has encouraged credit unions to participate in submitting comments on related Regulatory Alerts. For more information, view the association’s Regulatory Alert breaking down the proposed rule. The association will continue to keep credit unions informed on how this rulemaking will impact them and their members. Read the full letter here.
Share This
Related Resources
Add to Calendar 2024-05-02 14:00:00 2024-05-02 14:00:00 Mastering Resilience in Incident Response Plans About the Webinar An Incident Response (IR) plan is crucial for guiding credit unions through major incidents efficiently and effectively. However, many IR plans lack resilience, making them less adaptable to the evolving threat landscape. Join us for our webinar Mastering Resilience in Incident Response Plans where DefenseStorm cyber experts Elizabeth Houser and James Bruhl will delve into the importance of resiliency within cybersecurity IR plans. Don’t miss out on the opportunity to learn how to: Ensure IR plan accessibility so that all team members with assigned roles are prepared for effective incident response. Conduct efficient and regular reviews to ensure roles and responsibilities are current, tools are relevant, and compliance requirements are met. Implement and utilize tabletops to regularly test the effectiveness of your IR plan. Enhance preparedness, efficiency, and confidence among responders. View On-Demand Web NAFCU digital@nafcu.org America/New_York public
Mastering Resilience in Incident Response Plans
preferred partner
DefenseStorm
Webinar
Add to Calendar 2024-04-30 14:00:00 2024-04-30 14:00:00 State of Consumer Credit: How Behaviors have Shifted and Trends in US Bankcard Benchmarks About the Webinar In an era marked by volatility and evolving credit trends such as historic inflation and the rise of BNPL, credit unions must adapt to mitigate risks effectively. Join the experts at FICO in exploring how to leverage FICO Scores to enhance competitiveness while maintaining stability and compliance. Key Takeaways: Learn about the latest in consumer credit behaviors and score distributions since the pandemic Take a closer look at major US bankcard trends in comparison to the credit union industry, such as average card spend, balance, missed payments and more. View On-Demand Web NAFCU digital@nafcu.org America/New_York public
State of Consumer Credit: How Behaviors have Shifted and Trends in US Bankcard Benchmarks
preferred partner
FICO
Webinar
Add to Calendar 2024-04-25 14:00:00 2024-04-25 14:00:00 ChatGPT: What AI can do for you! ChatGPT has been created with one main objective – to predict the next word in a sentence, based on what's typically happened in the gigabytes of text data that it's been trained on. Did you ever hear of the saying, “People fear the unknown?” Artificial intelligence scares people, but it is the future, and you need to understand the tools and resources it offers. It’s also about saving time, that’s what technology and in this case, artificial intelligence can do for you. If you want to save time and have a better quality of life, this training is for you. Once you give ChatGPT a question or prompt, it passes through the AI model and the chatbot produces a response based on the information you've given and how that fits into its vast amount of training data. It's during this training that ChatGPT has learned what word, or sequence of words, typically follows the last one in a given context. During this webinar, ChatGPT: What AI can do for you, you’ll discover the background, purpose, usability, and the pros and cons. Don't miss this opportunity! Key Takeaways Learn the background of AI Understand the purpose of AI Identify the pros and cons Register Now $295 Members | $395 Nonmembers(Additional $50 for USB)One registration gives your entire team access to the live webinar and on-demand recording until April 25, 2025Go to the Online Training Center to access the webinar after purchase » Who Should Attend NCRMs Risk titles Education Credits NCRMs will recieve 1.0 CEUs for participating in this webinar Web NAFCU digital@nafcu.org America/New_York public
ChatGPT: What AI can do for you!
Credits: NCRM
Webinar
Add to Calendar 2024-04-25 14:00:00 2024-04-25 14:00:00 Unifying Two Different Executive Benefits Programs About the Webinar In part one we discussed how to retain key positions during a time of transition. In part two, we will look at how to combine executive benefits programs from two different organizations into a single high-performing program. Evaluating each program includes many different facets, from strategy and expense to performance and servicing. This session will provide important considerations, whether or not you have pending M&A activity. Key Takeaways: Is the plan design both retentive and efficient? Is the benefit expense properly mitigated? Does the legal agreement reflect the board’s intent? View On-Demand Web NAFCU digital@nafcu.org America/New_York public
Unifying Two Different Executive Benefits Programs
preferred partner
Gallagher
Webinar
Get daily updates.
Subscribe to NAFCU today.