NASCUS Presses Senate On Secondary Capital

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Meantime, NASCUS urged members of the Senate drafting their own regulatory relief bill for financial institutions to include a provision allowing the hundreds of state-chartered credit unions allowed to raise secondary capital to count that capital towards their net worth under NCUA's prompt corrective action (PCA) rules.

In a letter sent last week to Senate Banking Committee Chairman Richard Shelby, R-Ala., NASCUS said the current PCA requirements, limiting net worth to retained earnings, "constrains the credit union's ability to implement new programs or expand services that meet the changing needs of its membership."

At least a half-dozen states allow credit unions to raise secondary capital, but the PCA provisions of the Federal CU Act prevent all federally insured credit unions from counting it as net worth. NASCUS also asked Shelby to include provisions currently in the House's version of the regulatory bill to allow privately insured credit unions to join the Federal Home Loan System, and to exempt credit union securities broker/dealers operations from SEC registration.

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