Credit unions could accept supplemental capital that wouldn't beinsured by the NCUSIF and would be subordinated to other claims,according to provisions of a bill introduced Thursday by Reps.Peter King (R-N.Y.) and Brad Sherman (D-Calif.).

Under the measure, credit unions could accept non-share capitalaccounts and could use the money to cover operating losses inexcess of its retained earnings. The accounts would besubject to maturity limits set by a credit union's board.

The accounts would be subordinate to all other claims againstthe credit union, including the claims of creditors, shareholdersand the NCUSIF.

The measure would give the NCUA the power to determine whether acredit union is “sufficiently capitalized and well-managed,'' to beeligible to accept the capital.

Last year, NCUA Chairman Debbie Matz wrotelawmakers that allowing non low-income credit unions to acceptsupplemental capital would let “well-managed credit unionsbetter manage net worth levels under varying economicconditions.”

The agency hasn't taken a position on the bill introducedThursday.

CUNA President/CEO Bill Cheney said the measure “is all aboutensuring that consumers and their communities will continue toreceive support from their credit unions as they grow.''

NAFCU President/CEO Fred Becker said his association is pleasedthat the measure “preserves the not-for-profit, mutual,member-owned and cooperative structure of credit unions and ensuresthat ownership remains with the credit union's members.''