In its advanced notice of proposed rulemaking (ANPR), the National Credit Union Administration (NCUA) Board expressed concerns that supplemental capital could adversely impact the credit union industry’s tax exemption.
The Board speculated that accessing Wall Street for capital could cause Congress to reconsider the credit union industry’s federal tax exemption.
According to the ANPR,
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“[T]he Board is aware that part of the basis for the credit union tax exemption was that Congress recognized most credit unions could not access the capital markets to raise capital. If all credit unions … have the ability to access the capital markets to meet capital standards, it could call into question one of the bases for the credit union tax exemption.”