When the National Credit Union Administration board
The agency followed that up by highlighting those requests on its web page. In an item included its front page news carousel – which continues to appear – NCUA asked for “broad stakeholder engagement.”
Despite the appeals, the result so far has been something resembling a deafening silence.
Nearly five weeks after the board approved the advance notice of proposed rulemaking and two weeks since
The absence of correspondence is a definite break from NCUA’s recent past. In 2015 and 2016, it received record numbers of letters commenting on proposed amendments to risk-based capital, member business lending and field of membership regulations.
Tuesday, an agency spokesman said officials remain hopeful they will receive a substantial number of responses about alternative capital, as well.
“NCUA’s board issued the advance notice last month to collect the thoughts and ideas from credit union stakeholders in front of the rulemaking process, to inform the agency as we study whether or not to make changes in the existing regulation,” the spokesman said in an email. “This is a complex undertaking, with significant implications for the credit union system. The board encouraged credit unions to comment, and we hope they will. This kind of dialogue in the early stages is quite valuable.”
Other sources emphasized the issue’s complexity. They noted NCUA raised a number of questions in the 50-page advance notice document.
“Supplemental capital has a strong support base in credit union land, although the intricacies of it probably make some credit unions hesitant to get involved in the details outlined in the ANPR,” former NCUA chairman Dennis Dollar wrote in an email Friday. “I would expect considerably more comments before the comment period ends, and I anticipate a great number more comments when a formal and specific proposal comes along.”
Credit unions aren’t the only ones hard at work drafting a response. An American Bankers Association spokesman said his group was planning to file a comment letter opposing credit union access to investor capital, although he, too, mentioned the complications involved in the alternative capital discussion.
NCUA “asked some pretty specific questions,” said Keith Leggett, a retired ABA economist who writes CU Watch, a blog about credit unions. “It’s going to take time for people to think things through.”
Echoing Dollar, Leggett said NCUA would probably receive more responses once it issues an actual proposed regulation.
As things stand now, retained earnings are the only form of capital available to most credit unions. Low-income designated credit unions, which make up a little more than 40% of the total number of institutions, are permitted to raise secondary capital and count it toward net worth, but fewer than 100 currently do so, according to NCUA statistics. Through June 30, there was about $181 million of secondary capital on the industry’s books.
Along with streamlining its rules governing secondary capital, the board is also mulling plans to allow all credit unions to issue supplemental capital that would count toward the
