NASCUS Chairman Shares Credit Union Capital Perspectives with International Regulators

June 15, 2011 - Credit union regulators from 26 countries gathered in Alexandria, Virginia from June 8-10 for the International Credit Union Regulators Network “Regulators Roundtable.” NASCUS Chairman Tom Candon (VT) participated in the meeting and presented on enhancing credit union capital to his international peers.

Candon provided background on credit union capital for U.S. credit unions and provided a landscape of the economic environment impacting credit unions. He explained that U.S. credit unions can only rely on retained earnings for net worth, an archaic capital structure that is unique to U.S. credit unions. U.S. credit unions are the only depository institutions in the world that cannot raise capital outside of retained earnings.

At the meeting, several regulators shared their experiences with supplemental capital for credit unions, including Canadian regulator, Gouro Sall-Diagne, Director, Autorité des marchés in Quebec, who co-presented with Candon. Sall-Diagne explained to the audience that Canadian credit union regulators are currently addressing how they will adopt Basel III standards for credit unions. In Canada, credit unions can raise capital through several ways including subordinated debt, membership capital and other capital instruments in addition to retained earnings. NASCUS supports supplemental capital options for U.S. credit unions and continues to advocate for the necessary legislative and regulatory changes.

Both Candon and Sall-Diagne shared statistics on credit union consolidation in both countries as well as trends in mergers among credit unions. In the U.S. over the last 10 years, the number of credit unions has decreased by almost half. Today, there are about 5,500 credit unions compared to more than 10,000 in 2000.

The International Credit Union Regulators Network (ICURN) Regulators’ Roundtable is an annual gathering of credit union regulators from around the world in coordination with the World Council of Credit Unions (WOCCU). Other topics discussed by the group included mergers, corporate governance, tactics for resolving troubled institutions, indebtedness and many others. The meeting was hosted by the National Credit Union Administration in their Alexandria, Va. headquarters.