In a letter sent yesterday to CUNA, NAFCU President Fred Becker agreed to modify his group's alternative capital proposal to allow NCUA assistance to credit unions to be counted as alternative capital.
"NAFCU is also willing to support assistance to credit unions provided by the National Credit Union Administration (NCUA) Board under 12 USC ? 1788 (208 Assistance) being counted as alternative capital," the letter, addressed to CUNA President Dan Mica, said.
"NAFCU believes that this form of specific assistance has a direct correlation to helping protect the share insurance fund. In the past, NAFCU has supported the inclusion of Central Liquidity Fund (CLF) funds as capital for the corporate credit unions as an emergency measure (directly relative to systemic risk) and has supported changes to net worth for the purposes of the Troubled Asset Relief Program (TARP) assistance for the sake of parity."
The NAFCU Board reaffirmed its position that alternative capital should only be provided by a credit union's members, Becker added. "From a policy standpoint, NAFCU cannot support a general provision of government assistance being counted towards retained earnings, credit union-to-credit union capital infusions or alternative capital being provided from nonmembers in exigent circumstances."
Becker also told Mica that the NAFCU board of directors remains committed to supporting alternative capital. "It is, indeed, critical that we work hand-in-hand in pursuing legislation as expeditiously as possible," Becker said.