WASHINGTON (1/20/11)--The National Association of State Credit Unions (NASCUS) this week backed the National Credit Union Administration’s (NCUA) support for potential additional sources of capital for credit unions by noting that credit unions can manage the complexities of supplemental capital, and that NCUA and state regulators are fully capable of managing its regulation. NCUA Chairman Debbie Matz, in a letter to the top members of the Senate Banking Committee and the House Financial Services Committee, recently urged statutory changes that would correct the disincentive that she said is impacting even strong, well-capitalized credit unions. She recommended allowing qualifying credit unions to issue supplemental capital and excluding assets that carry zero risk, such as short-term U.S. Treasury securities, from the definition of total assets. In the group’s letter to the NCUA, NASCUS President/CEO Mary Martha Fortney said that achieving capital reform has long been a matter of safety and soundness, and added that increased capital and investor discipline can provide credit unions with critical buffers during economic downturns. Earlier this week, Credit Union National Association (CUNA) President/CEO Bill Cheney commended the NCUA’s public support for capital reform. He said the regulator’s letter could be helpful as CUNA works to “educate members of Congress about the importance of establishing risk-based and supplemental capital avenues for credit unions."