I read, with interest, Henry Wirz’s letter in the May 11 issue, "Capital Plan Is a Bust."
First, for clarification, the white paper was not "recently released." It was released on April 12, 2010.
Second, the white paper was released under my and my working group’s authorship. It has not been adopted by the NCUA board and does not reflect NCUA’s official position on supplemental capital for credit unions as noted in the media advisory upon its issuance. The white paper is available on the NCUA’s website, www.ncua.gov.
We designed the white paper as a broad exploration of the issues related to supplemental capital and to spark discussion on this important issue.
Finally, what is not taken into account is that almost every other cooperative financial system in the world (and other cooperatives) permit those entities to raise supplemental capital without compromising the cooperative model. It can and has been done. In my personal opinion, the trick is to figure out how it can be done appropriately in the U.S. and taking into account all of the considerations and concerns cited in the white paper.