The NCUA board issued two proposals and heard a quarterly update on the National Credit Union Share Insurance Fund at its Thursday meeting.

Agency staff project the share insurance fund equity ratio increase to 1.30% for the six-month period ending Dec. 31, 2022.

The subordinated debt proposal would make changes to the subordinated debt rule. It would:

• Replace the maximum maturity of subordinated debt notes with a requirement that any credit union seeking to issue notes with maturities longer than 20 years demonstrate how such instruments would continue to be considered “debt.”
• Extend the regulatory capital treatment of grandfathered secondary capital to the later of 30 years from the date of issuance or Jan. 1, 2052.
• Make four minor modifications to the current rule to make it more user-friendly and flexible.

Comments on the proposal are due within 60 days of its publication in the Federal Register.

The member expulsion rule would amend federal credit union bylaws to incorporate the Credit Union Governance Modernization Act, enacted in March. The rule contains a proposed policy by which a federal credit union member may be expelled for cause by a two-thirds vote of a quorum of the credit union’s board of directors.

Comments on the proposal are due within 60 days of its publication in the Federal Register.