WASHINGTON — Prominent credit union consultancy Callahan & Associates has suggested that qualifying as low-income credit unions could help more CUs access a source of capital other than retained earnings.

Chip Filson, CEO of the firm, made the suggestion during an August 12 Web event that Callahan hosted. He pointed out that while the 1998 Credit Union Membership Access Act restricts most credit unions to using retained earnings as their source of capital, it also allows credit unions with a low-income designation to use secondary accounts that are uninsured and subordinate to other accounts as sources of capital.

Money in subordinate accounts is money that would be repaid last if the credit union were to be dissolved, behind the claims of creditors or the NCUSIF.

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