ALEXANDRIA, Va. (12/10/14, UPDATED 4:01 p.m. ET)--National Credit Union Administration board member J. Mark McWatters supports including supplemental capital in the agency's risk-based capital (RBC) proposal set to be issued for a 90-day comment period at the Jan. 15 NCUA board meeting.
McWatters confirmed that to CUNA. He also raised this issue with members of the New Jersey Credit Union League Tuesday at the NCUA's headquarters. The NCUA board member said he would support a provision within the risk-based capital proposal that would allow credit unions to access more sources of capital.
CUNA has urged the NCUA to allow any federally insured credit union to use supplemental capital to meet RBC requirements, which could be permitted without statutory changes. CUNA also supports statutory changes to permit the use of supplementary capital to meet Tier I net worth requirements. Currently, only low-income designated credit unions may use supplemental capital for net worth requirements.
On the legislative front, CUNA supports the Capital Access for Small Businesses and Jobs Act (H.R. 719). Introduced by Rep. Peter King (R-N.Y.), the bill would allow the NCUA to determine what forms of supplemental capital could be offered.
Those types could include, but are not limited to, voluntary or mandatory membership subscriptions or a subordinated debt type instrument. The bill also establishes consumer protections and suitability requirements that any form of supplemental capital must meet.
CUNA testified before the Senate Banking Committee in September, saying that among other concerns CUNA had with the risk-based capital proposal, the lack of any mention of increased access to capital was a flaw in the plan.