The Capital Access for Small Businesses and Jobs Act (H.R. 989), introduced by Representatives Peter King [R-NY] and Brad Sherman [D-CA], addresses this fundamental problem by allowing healthy, well-run credit unions to utilize certain specified forms of supplemental capital. The bill amends the Federal Credit Union Act to empower federal credit unions to hold certain specified forms of supplemental capital. The bill redefines “net worth” with respect to any insured credit union (other than a low-income credit union) to include uninsured non-share capital accounts that:
(1) do not alter the cooperative nature of the credit union;
(2) are subordinate to all other claims against the credit union, including the claims of creditors, shareholders, and the National Credit Union Share Insurance Fund;
(3) are available to cover operating losses in excess of retained earnings and, to the extent so applied, will not be replenished;
(4) if they have a stated maturity, have an initial maturity of at least five years, and their net worth may be discounted at the Board’s discretion when the remaining maturity is less than five years;
(5) are subject to disclosure and consumer protection requirements as determined by the Board;
(6) are offered by a credit union that is sufficiently capitalized and well-managed, and
(7) are subject to such rules and regulations as the Board may establish.