Sarah Snell Cooke's Editor's Colum Aug. 5 noting the importance of providing credit union access to capital a top legislative item for 2011 could not have been timelier.

As she states, "Healthy credit unions should be permitted to offer members the ability to invest in their financial institution … [maintaining] the one vote philosophy."

It is important to note, as NAFCU has long advocated, that the term "members" includes both natural persons and non-natural person entities, as currently set forth in law and regulation.

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Sources of alternative capital would, therefore, obviously include non-natural person entities within a credit union's membership such as a sponsoring organization, its SEGs or in the case of a community credit union, any entity within its field of membership.

At the specific request of NCUA's then-chairman, Michael Fryzel, we are pleased to have taken the leadership role in working with CUNA and NASCUS to reach an accord on a basic set of principles for secondary capital. These principles emphasize the importance of maintaining "the not-for-profit, mutual, member-owned and cooperative structure of credit unions," thereby retaining the one vote philosophy that Cooke advocates.

The principles adopted by CUNA and NASCUS have now been refined to draft legislation, which was forwarded to NCUA Chairman Debbie Matz. Our work led to Chairman Matz's proposal for secondary capital to House Financial Services Chairman Barney Frank (D-Mass.). Her proposal incorporated both secondary capital and risk-based capital, as Cooke also suggests.

Looking ahead, we are encouraged by the administration's recent indication that it will soon focus on capital reform. NAFCU intends to ensure that the administration's examination of capital reform includes our industry and we are committed to continuing to work actively with CUNA and NASCUS, as well as Chairman Matz and the administration to aggressively move Matz's proposal forward into enactment.

Fred R. Becker Jr.

President

NAFCU

Arlington, Va.

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