<p>INDIANAPOLIS – Concerns about alternative or secondary capital generally are holding up the NCUA's regulatory review of how low-income and community development credit unions may use money invested as secondary capital, according to Anthany LaCreta, NCUA's director of credit union development. Currently, NCUA allows low-income credit unions to attract investments to use as secondary capital against their Prompt Corrective Action (PCA) calculation. But, in each of the last five years of the terms of those investments, NCUA requires the credit union discount 20% of the investment. Thus a credit union which might have a $100,000 loan at 1% from a major bank or foundation for seven years can only fully count that investment as secondary capital for two years. In the third year of its term, the start of the NCUA's five year countdown, the credit union can only count $80,000 of it. Low-income credit unions want the agency to review its regulation to see how that restructuring might be changed. But LaCreta said that concerns about how its actions might impact the conversation credit unions are having on secondary capital generally are slowing the agency's review of the regulations.</p>

Continue Reading for Free

Register and gain access to:

  • Breaking credit union news and analysis, on-site and via our newsletters and custom alerts.
  • Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders.
  • Educational webcasts, white papers, and ebooks from industry thought leaders.
  • Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.