Matz Prods Congress on Supplemental Capital
If a journey of 1,000 miles does begin with one step, then NCUA Chairman Debbie Matz's letter to Congress on supplemental capital could be the beginning of a long trip.
Saying she wants to "reverse the disincentive" for credit unions to accept new deposits, Matz asked lawmakers to let credit unions exclude no-risk assets from their definition of total assets and to allow supplemental capital.
Neither committee has set its agenda for this congress session, but lobbyists for CUNA and NAFCU said they were optimistic that the issue could at least be discussed.
"The stars aren't quite aligned yet," said CUNA Senior Vice President John Magill. "But the chairman's letter is a strong signal that there is support for moving forward. We feel good about our chances."
But the effort to attain supplemental capital could be harmed by a report from the NCUA and by some divisions between the trade associations.
Last April, a report by an NCUA task force chaired by Board Member Gigi Hyland said any capital must adhere to three principles: preservation of the cooperative credit union model, robust investor safeguards and increased prudential safety and soundness safeguards.