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NCUA briefed on LICU secondary capital plan
ALEXANDRIA, Va. (2/19/10)--The National Credit Union Administration (NCUA) at its Feb. 18 board meeting was fully briefed on an interim final rule addressing secondary capital accounts for low-income credit unions. The interim final rule, which was approved by the NCUA earlier this month via notational vote, allows a low-income credit union (LICU) to redeem all or part of government-funded secondary capital, along with its matching secondary capital at any time after it has been on deposit for two years. This rule follows the U.S. Treasury Department's announcement of the Community Development Capital (CDC) Program, an initiative intended to enable LICUs, banks and thrifts to increase lending in low-income areas. NCUA Chairman Debbie Matz said that the Board adopted the interim final rule early to comply with application deadlines imposed by the Treasury. LICU’s have been given until April 2 to apply for secondary capital under the CDC Program, and the NCUA will review the LICU applications before providing their recommendations to the Treasury. These recommendations will include the NCUA’s judgments regarding an LICU’s suitability for the program, whether that LICU should acquire privately funded, matching secondary capital before it receives secondary capital through the CDC Program, and the amount funding that the Treasury should provide to the LICU through the CDC Program. The NCUA will also confer with state regulators before it issues any recommendations regarding state-chartered credit unions. The interim final rule is effective immediately upon its publication in the Federal Register and will be subject to a 30 day comment period. The NCUA may provide further details for credit unions via a webinar, Board Member Gigi Hyland said.


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