WASHINGTON (10/14/09)—The Credit Union National Association (CUNA) will meet with the National Association of Federal Credit Unions (NAFCU) today to begin a draft of the groups’ letter to the National Credit Union Administration (NCUA) on a joint proposal for reforming alternative capital rules for credit unions. “It is our understanding that we have reached an agreement with NAFCU on a proposal,” said CUNA Deputy General Counsel Mary Dunn Tuesday. CUNA is also working with the National Association of State CU Supervisors on the alternative capital plan. In the letter to NCUA, CUNA and NAFCU will propose that credit unions be allowed to accept and count as capital funding such sources as:
* Members of the credit union; * Member sponsors and select employee groups of CUs; and * Assistance provided to credit unions by NCUA under Section 208 of the FCU Act.
Additional capital would not be federally insured and could pay a higher return to members. The additional capital would also be subordinated to other claims against a credit union and the National Credit Union Share Insurance Fund. The NCUA is developing its own white paper study on alternative capital issues. First expected to be released in December, board member Gigi Hyland indicated at recent NCUA Town Hall meetings that the agency would likely advance that timing. Federal lawmakers have indicated to CUNA that agreement on an approach to alternative capital must be reached by CUNA, NAFCU, NCUA, NASCUS, and U.S. Treasury Department for a plan to become a viable topic on Capitol Hill.