WASHINGTON – Rep. Spencer Bachus (R-Ala.), immediate past chair of the House Financial Services Committee, has agreed to co-sponsor the credit union supplemental capital bill, the Capital Access for Small Businesses and Jobs Act (H.R. 719).
The bi-partisan legislation would allow well-capitalized credit unions to match a growing deposit base from a growing membership with capital from sources other than retained earnings—which currently is the only type of capital that counts toward capital ratio. It was introduced in February and has reached 29 co-sponsors thus far.
Introduced at CUNA’s request, the legislation has NCUA’s support as well.
Last month, NCUA Chair Debbie Matz wrote to the sponsor and chief co-sponsor to say that if Congress enacts the capital-access bill, her agency will "promptly propose the necessary rule changes required for implementation."
Matz wrote, "As we witnessed during the recent economic crisis, maintaining sufficient capital is critical at time of economic stress...Your legislation would provide credit unions with an additional tool to promote sufficient capital—even under adverse economic conditions—and ensure that healthy credit unions would no longer be forced to turn away deposits in order to protect their net worth."
Supplemental capital reform is part of CUNA’s and the state leagues’ " four-pillar" 2013 legislative agenda, which includes preserving the credit union tax status, reducing regulatory burden, engaging in housing finance reform, and advancing credit union charter enhancements, such as increased member business lending authority and supplemental capital.