NCUA Issues Subordinated Debt and Member Expulsion Proposals | 2022-09-22

The NCUA Board of Directors issued two proposals and heard a quarterly update on the National Credit Union Equity Insurance Fund at its Thursday meeting.

Agency staff expect the Equity Insurance Fund’s capital ratio to increase to 1.30% for the six-month period ending December 31, 2022.

The subordinated debt proposal would change the subordinated debt rule. It would be :

  • Replace the maximum maturity of subordinated debt securities with a requirement that any credit union seeking to issue securities with maturities greater than 20 years demonstrate how these instruments would continue to be considered “debt”.
  • Extend regulatory capital treatment of secondary grandfathered capital to the later of 30 years from the date of issue or January 1, 2052.
  • Make four minor changes to the current rule to make it more user-friendly and flexible.

Comments on the proposal must be filed within 60 days of its publication in the Federal Register.

The member expulsion rule Amend federal credit union bylaws to incorporate the Modernizing Credit Union Governance Act, signed into law in March. The rule contains a policy proposal that a member of a federal credit union may be expelled for cause by a two-thirds vote of a quorum of the board of directors of the credit union.

Comments on the proposal must be filed within 60 days of its publication in the Federal Register.


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John A. Bogar