The National Credit Union Administration said it will hold a board meeting next Thursday to consider an ICBA-opposed proposed rule to allow tax-exempt credit unions to issue alternative forms of capital.
The NCUA is considering a proposal that may authorize credit unions to issue “supplemental capital instruments” that would count toward their risk-based net-worth requirement. Formerly known as its “Alternative Capital” plan, the agency is now labeling it “Subordinated Debt” after introducing an advance notice of proposed rulemaking nearly three years ago.
In a 2017 comment letter, ICBA said the plan would put the financial system and taxpayers at increased risk merely to expand the activities of credit unions beyond the limits justified by their tax exemption. ICBA urged the NCUA to withdraw its proposal.
The NCUA also plans to consider a proposal on credit union acquisitions that may provide more transparency and disclosures when a credit union acquires bank assets. ICBA has raised the profile of this growing trend through its “Wake Up” campaign and Credit Union Task Force, which has led to increased pressure from Congress on this issue.
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