ALEXANDRIA, Va. (4/22/15)--National Credit Union Administration Chair Debbie Matz went into some specifics on how the agency could allow for supplemental capital, in this month's edition of The NCUA Report.
Matz uses her column this month to elaborate on the five areas of what she previously referred to as "the year of regulatory relief."
Matz said there is a clear need for supplemental capital in certain circumstances, and she is committed to allowing it to be counted in full.
"For example, NCUA could count certain forms of subordinated debt as supplemental capital for the risk-based capital ratio," Matz wrote. "It could be issued to members and non-members, but it would be uninsured."
Matz added that for this to happen, three changes beyond risk-based capital the NCUA would need to:
Provide consumer protections;
Change the order of Share Insurance Fund payout priorities to recognize that supplemental capital accounts are not insured; and
Set prudent standards, such as minimum redemption periods, to ensure supplemental capital is available to cover losses during times of stress.
Matz said effective dates of these changes could coincide with the proposed implementation of the agency's risk-based capital proposal in 2019.
Elsewhere in the publication, board member J. Mark McWatters reflects on his experience at CUNA's Governmental Affairs Conference last month. McWatters said he was "energized" by speaking to thousands of credit union leaders and said he is committed to "a growth oriented regulatory environment that will protect the Share Insurance Fund."
Other highlights of this month's The NCUA Report include:
An economic report from NCUA Chief Economist John Worth;
Information on identifying and preventing common recordkeeping deficiencies;
A summary of actions from the NCUA board's March meeting; and
A look at mortgage disclosure changes coming in the second half of 2015.