WASHINGTON (6/6/13)--Rep. Spencer Bachus (R-Ala.), immediate past chair of the House Financial Services Committee, has agreed to co-sponsor a credit union supplemental capital bill, the Capital Access for Small Businesses and Jobs Act (H.R. 719).
The bill would allow well-capitalized credit unions to match a growing deposit base from a growing membership with capital from sources other than retained earnings--which currently is the only type of capital that counts toward capital ratio. It was introduced in February by Rep. Pete King (R-N.Y.) and reached 29 co-sponsors this week when Rep. Charles Rangel (D-N.Y.) signed on with his support.
The Credit Union National Association strongly backs the bill and the legislation has regulators' support as well. The League of Southeastern Credit Unions met with Bachus during the recent Memorial Day District Work Session to discuss credit union proirities, such as the supplemental capital bill.
Last month, National Credit Union Administration Chair Debbie Matz wrote to lawmaker King, and his chief co-sponsor, Rep. Brad Sherman (D-Calif.), to say that if the U.S. Congress enacts the capital-access bill, her agency will "promptly propose the necessary rule changes required for implementation."
Matz wrote, "As we witnessed during the recent economic crisis, maintaining sufficient capital is critical at time of economic stress...Your legislation would provide credit unions with an additional tool to promote sufficient capital--even under adverse economic conditions--and ensure that healthy credit unions would no longer be forced to turn away deposits in order to protect their net worth."