The patience and endurance finally paid off.

The three big credit union trade associations have been workingfor years to find a way to allow supplemental capital for non-lowincome credit unions.

And they are praising Thursday's introduction of a bill by Reps. Peter King (R-N.Y.) and BradSherman (D-Calif.) as a significant step toward achieving theirgoal.

“For NASCUS and state regulators, access to supplemental capitalfor credit unions has always been a matter of safety and soundness.This critical reform gives credit unions the necessary capitalflexibility to respond to economic conditions, both in good timesand bad,'' NASCUS President/CEO Mary Martha Fortney said in astatement.

CUNA President/CEO Bill Cheney wrote lawmakers that the measure“would provide credit unions with appropriate ability to raisecapital from sources other than retained earnings without puttingin jeopardy the 'one member, one vote' principle that is thebedrock of the credit union ownership structure.''

NAFCU President/CEO Fred Becker wrote lawmakers that allowing supplemental capital would “further minimize theprobability of credit union insolvency, ensure they continue toserve the nearly 94 million Americans who rely on credit unions asa vital source of financial services, and allow them to grow tomeet the needs of members.''

In the past, CUNA has expressed concern that the NCUA wouldplace too many regulatory constraints on credit unions that want toseek secondary capital. NAFCU expressed concern about lettingsupplemental capital from outside the credit union system.

In April 2010, a report by an NCUA task force chaired by Board Member GigiHyland said any capital must adhere to three principles:preservation of the cooperative credit union model, robust investorsafeguards and increased prudential safety and soundnesssafeguards.

The report noted that the agency's supervisory experience withthe 41 low-income credit unions (out of 1,102) that receivesecondary capital has been “mixed.” It criticized some of thosecredit unions for poor due diligence and “premature and excessivelyambitious concentrations of uninsured secondary capital to supportunproven or poorly performing programs.”