Friday, February 10, 2012 11:40:00 AM
WASHINGTON – Bi-partisan legislation was introduced today in the U.S. House of Representatives by Reps Peter King (R-NY) and Brad Sherman (D-CA) to enable credit unions to accept supplemental capital.
The Capital Access for Small Business & Jobs Act (H.R. 3993) would permit NCUA to allow credit unions to accept other forms of capital, provided that it does not alter the cooperative ownership structure of credit unions. The legislation requires that this capital be uninsured and subordinate to other claims against the credit union, including those of creditors, shareholders, and the NCUSIF. The bill authorizes the NCUA to set maturity limits on this capital and restricts the ability to raise supplemental capital to credit unions, which are “sufficiently capitalized and well managed.”
NCUA hasn’t taken a position on the bill, though last year Chairman Matz wrote lawmakers that allowing non-low-income credit unions to accept supplemental capital would let “well-managed credit unions better manage net worth levels under varying economic conditions.''
The legislation has the support of both CUNA and NAFCU.
CUNA President/CEO Bill Cheney said the measure “is all about ensuring that consumers and their communities will continue to receive support from their credit unions as they grow.’’
A copy of the legislation as well as CUNA’s letter of support of the bill sent to Representatives King and Sherman is available on the League Web site by clicking here.
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