The ability to access additional capital is more important than ever as low-income designated credit unions (LICUs), complex credit unions, and new credit unions are at risk of being undercapitalized due to the stress put on the economy. The League recently submitted a letter in support of the National Credit Union Administration’s (NCUA) proposed rule that would update its regulations to allow eligible credit unions to issue subordinated debt for regulatory capital standards. The rule proposal would better organize certain NCUA regulations, improve clarity and transparency, and incorporate enhanced investor protections. It would also amend parts of the NCUA’s regulations to update the authority of low-income-designated credit unions to issue subordinated debt. Finally, the rule would authorize complex credit unions subject to the agency’s risk-based capital requirements and new credit unions to use subordinated debt under certain circumstances.
Please find the full comment letter on the regulatory advocacy webpage, and contact League Regulatory Counsel Chris Noble if you have questions or concerns about the proposed rule on subordinated debt.