NASCUS PRESIDENT AND CEO LUCY ITO COMMENT ON NCUA BOARD ISSUING FINAL RULE ON SUBORDINATED DEBT

‘State system looks forward to working closely with NCUA on implementation’

Dec. 17, 2020

CONTACT: Lucy Ito, NASCUS president and CEO, lito@nascus.org; (703) 528-8351

The state system has long said that subordinated debt should be a part of the risk-based capital framework because it encourages well-managed credit unions to attract additional loss-absorbing forms of capital that they would otherwise forego. The risk-based capital rulemaking itself is intended to increase the capital buffer standing of a credit union before any effect on the share insurance fund, and subordinated debt is consistent with that goal.

NASCUS and state regulators look forward to working closely with NCUA in preparing for the implementation of the subordinated debt rule, and related capital rules, given the state system’s familiarity and experience with this form of capital.

The state system thanks the NCUA Board for moving forward on this final rule, which has been the focus of intense work over the last four years.

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NASCUS is the national association that advocates for a strong and healthy state credit union system, and whose members include state regulatory agencies, credit unions, credit union leagues, and organizations that support the state credit union system.