NAFCU hails Rep. King for championing supplemental capital for credit unions

WASHINGTON, DC (March 13, 2014) — National Association of Federal Credit Unions (NAFCU) President and CEO Dan Berger issued the following statement in response to today’s call by Rep. Peter King (R-N.Y.) for action on H.R. 719, the “Capital Access for Small Businesses and Jobs Act,” which he introduced last year with Rep. Brad Sherman (D-Calif.) to address the critical issue of supplemental capital for credit unions. King reiterated the need for this legislation in a statement submitted for the record of a mark-up of bills by the House Financial Services Committee.

“NAFCU thanks Rep. King for his continued leadership on this issue,” said Berger. “Capital reform is one of the five key points in NAFCU’s credit union regulatory relief plan, with access to supplemental capital a priority. That priority is even more important now in the face of NCUA’s proposed risk-based capital rule, which could force some credit unions to shoulder a disproportionate amount of burden for the safety and soundness of the credit union industry.”

Berger added, “We appreciate the support Reps. King and Sherman continue to show the credit union industry. We thank them for championing legislation that would further credit unions’ ability to operate effectively within the financial marketplace and ensure superior service to their members.”

H.R. 719, which reflects a key element of NAFCU’s five-point plan for credit union regulatory relief, proposes that non-share capital accounts:

  • do not alter the cooperative nature of the credit union;
  • are uninsured;
  • are subordinate to all other claims against the credit union, including the claims of creditors, shareholders, and the National Credit Union Share Insurance Fund (NCUSIF);
  • are available to be applied to cover operating losses of the credit union in excess of its retained earnings and, to the extent so applied, will not be replenished;
  • are subject to maturity limits as determined by the credit union board; and
  • are offered by a credit union that is determined by the board to be sufficiently capitalized and well-managed.

King and Sherman introduced similar legislation last Congress as H.R. 3993, the “Capital Access for Small Businesses and Jobs Act.”

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