Supplemental Capital Bill Introduced
Credit unions could accept supplemental capital that wouldn’t be insured by NCUSIF and would be subordinated to other claims, according to provisions of a bill introduced by Rep. Peter King (R-N.Y.) and Rep. Brad Sherman (D-Calif.).
Under the measure, credit unions could accept nonshare capital accounts and could use the money to cover operating losses in excess of their retained earnings. The accounts would be subject to maturity limits set by a credit union’s board. In addition, the law mandates that the accounts would be subordinate to all other claims against the credit union, including those of creditors, shareholders and the NCUSIF.
The agency hasn’t taken a position on the King-Sherman bill.
CUNA Chief Economist Bill Hampel said if the measure is passed, it would take some time before investors become familiar with credit unions as a desirable place for their money.