PRESS RELEASE
November 14, 2008
ARLINGTON, Va. —With a primary emphasis on credit union safety and soundness, NASCUS and state regulators have taken action to pursue the legislative and regulatory amendments allowing credit unions access to supplemental capital.
NASCUS and state regulators wrote to Congressional leaders on November 14 urging them to make the necessary legislative change to allow credit unions access to supplemental capital. NASCUS explained that given the current unpredictable economic conditions, allowing credit unions access to supplemental capital will bolster safety and soundness and provide further stability for the credit union system.
“We feel strongly that now is the time to permit this important change,” NASCUS told Congress. “Unlike other financial institutions, credit union access to capital is limited to reserves and retained earnings from net income. Since net income is not easily increased in a fast-changing environment, regulators recommend additional capital-raising capabilities for credit unions.”
In its letter, NASCUS emphasizes that while credit unions remain safe and sound in this troubled and volatile market, supplemental capital will enhance their ability to react to market conditions, grow into the future and serve their members in times of economic trouble.
“NASCUS believes that there is no reason to delay addressing credit union capital issues,” said NASCUS President and CEO Mary Martha Fortney. “Supplemental capital will give credit unions further flexibility in changing market conditions, enhance their future viability and strengthen their safety and soundness.”
Further, supplemental capital will allow credit unions to protect their liquidity as well as empower them to respond proactively and efficiently in a constantly changing financial environment. NASCUS will work with the credit union system to encourage Congress to approve a legislative change to definition of net worth in the Federal Credit Union Act to allow credit unions access to supplemental capital.
NASCUS has long supported supplemental capital for credit unions and has authored a white paper on supplemental capital models. To view the white paper, click here. To download the November 14 letter, follow this link.
Information
Contact:
Kate Hartig, Director, Communications and Public Affairs,
(703) 528-0669 or kate@nascus.org
The
NASCUS mission is to enhance state credit union
supervision and advocate a safe and sound state
credit union system.
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