League supports NCUA development of supplemental capital proposed rule
Thursday, May 11, 2017
This week, the Carolinas Credit Union League submitted a comment letter in response to the National Credit Union Administration’s (NCUA) advance notice of proposed rulemaking (ANPR) for supplemental capital.
The NCUA Board issued the ANPR in early February to solicit comments on alternative forms of capital federally insured credit unions could use in meeting capital standards required by statute and regulation. For purposes of the ANPR, alternative capital includes two different categories: secondary capital and supplemental capital.
Advocating on behalf of credit unions in North and South Carolina, the League expressed support for the development and implementation of a supplemental capital rule.
Reasons for supporting supplemental capital as an alternative capital option include:
- Credit unions are currently the only financial institutions that do not have the authority to raise supplemental capital and have it count towards the statutory capital requirement;
- Rapidly changing technology;
- Member demands for new products and services; and
- The current regulatory burden on credit unions.
“These factors are ample justification for a regulation that will assist credit unions in managing their capital,” said Jeanne Couchois, VP, compliance and regulatory counsel for the League.
The letter goes on to address specific issues around public policy, regulatory factors for consideration when drafting a regulation, mergers, and tax status implications.
Log in to view the full comment letter here.