NCUA Eases Secondary Capital Supervision
The NCUA revised its supervisory policies related to secondary capital on Monday.
NCUA Board Chairman Debbie Matz said the agency changed its National Supervision Policy Manual to accelerate the approval of secondary capital requests by the agency’s regional offices and to make it possible for credit unions that have secondary capital to return the portions of the loans that no longer count towards net worth.
“Under my Regulatory Modernization Initiative, NCUA seeks to lift compliance burdens from credit unions where it’s prudent and consistent with safety and soundness,” Matz said. “The supervisory changes related to supplemental capital make it easier for low-income credit unions to obtain, and give investors greater clarity and confidence. We’ve also added more flexibility and transparency.”
The NCUA said secondary capital helps low-income credit unions expand services to their members as well as maintain capital levels by supplementing net worth.
In December of last year, Matz announced the formation of a secondary and supplemental capital working group to be led by William Myers, director of the NCUA’s Office of Small Credit Union Initiatives. According to the NCUA, the group is set to publish a secondary capital web page later in the month.
“Representatives from credit unions and secondary capital investors are being consulted as the working group identifies investment models that are likely to be successful in the marketplace,” the NCUA said in a press release.
The group will consider ideas related to raising the value of secondary capital for low-income credit unions. Stakeholders are able to email comments to the working group at SCWG@ncua.gov.