The NCUA revised its supervisory policies related to secondarycapital on Monday.

NCUA Board Chairman Debbie Matz said the agency changed itsNational Supervision Policy Manual to accelerate the approval ofsecondary capital requests by the agency's regional offices andto make it possible for credit unions that have secondary capitalto return the portions of the loans that no longer count towardsnet worth.

“Under my Regulatory Modernization Initiative, NCUA seeks tolift compliance burdens from credit unions where it's prudent andconsistent with safety and soundness,” Matz said. “The supervisorychanges related to supplemental capital make it easier forlow-income credit unions to obtain, and give investors greaterclarity and confidence. We've also added more flexibility andtransparency.”

The NCUA said secondary capital helps low-income credit unionsexpand services to their members as well as maintain capital levelsby supplementing net worth.

In December of last year, Matz announced the formation of asecondary and supplemental capital working group to be led byWilliam Myers, director of the NCUA's Office of Small Credit UnionInitiatives. According to the NCUA, the group is set to publish asecondary capital web page later in the month.

“Representatives from credit unions and secondary capitalinvestors are being consulted as the working group identifiesinvestment models that are likely to be successful in themarketplace,” the NCUA said in a press release.

The group will consider ideas related to raising the value ofsecondary capital for low-income credit unions. Stakeholders areable to email comments to the working group at [email protected].