Members of low-income-designated credit unions were not being offered a new insured savings product in the NCUA's February 8, 2017 capital consultation. The agency was considering changes to an existing source of loss-bearing finance, alongside a different supplemental instrument that it had not authorized. The distinction matters when the public purpose is broader access to financial services. [2017-01713][2015-26790]
Qualifying secondary capital could already count toward both the net-worth ratio and the risk-based net-worth requirement at designated institutions. But the money was uninsured and subordinate to other claims. An approved capital plan, a minimum five-year maturity and rules making funds available for losses separated it from an ordinary deposit. Recognition as net worth declined as maturity approached. [2017-01713][2015-26790]
A separate 2015 final rule supplied the prospective risk framework. Its risk-based capital provisions were scheduled for January 1, 2019 for federally insured natural-person credit unions above $100 million in quarter-end total assets, as shown in the latest Call Report. That threshold did not limit every revision to prompt corrective action in the rule. [2017-01713][2015-26790]
The member-interest question was therefore how additional loss-bearing resources might support services without concealing who bears losses. Supplemental capital under consideration would count only toward the risk-based requirement, not the net-worth ratio. Neither document demonstrated more lending to households; together they described capital channels and constraints within one NCUA policy history, rather than independent evidence of a community benefit. [2017-01713][2015-26790]
Source documents
- Alternative Capitalhttps://www.govinfo.gov/content/pkg/FR-2017-02-08/html/2017-01713.htm
- Risk-Based Capitalhttps://www.govinfo.gov/content/pkg/FR-2015-10-29/html/2015-26790.htm