ALEXANDRIA, Va. (6/26/15)--Credit unions could coutn certain forms of debt as supplemental capital for the risk-based capital (RBC) ratio under a plan that National Credit Union Administration Chair Debbie Matz said might be considered soon..
Matz said a proposed rule on this likely will be released for comment in the fall. It would have an effective date to coincide with the agency’s RBC rule implementation in 2019.
“It turns out that under current law, NCUA could count certain forms of debt as supplemental capital for the risk-based capital ratio. For example, subordinated debt could be issued to members and non-members--but it would be uninsured," Matz said. "I understand the need for supplemental capital in certain circumstances. As part of modernizing risk-based capital, I am committed to counting supplemental capital in full.”
CUNA urged the NCUA to allow credit unions to use supplemental capital in meeting RBC requirements in its comment letter on the NCUA’s revised RBC proposal.
Matz added that the agency’s supplemental capital working group has been holding conference calls with credit union stakeholders around the country on potential legislative and regulatory changes to benefit credit unions interested in raising supplemental capital.
“The working group will wrap up this fall and provide me with its recommendations,” Matz said. “We’ll then take action at the board level.”
During her remarks, Matz also highlighted agency efforts during what she has called “the year of regulatory relief.” Matz was speaking at the National Association of Federal Credit Unions’ annual conference.
These efforts include:
In a separate statement, Matz urged credit unions to comment on the Consumer Financial Protection Bureau’s announced delay in effective date for its Truth in Lending Act-Real Estate Settlement Procedures Act integrated disclosures (TRID) rule.
The rule is proposed to become effective Oct. 3--the original effective date was Aug. 1--and comments on the proposal are due to the bureau by July 7.
“When the rule becomes effective, NCUA examiners will look for reasonable and good-faith efforts by credit unions towards substantial compliance with the final rule,” Matz said.