NASCUS Files Comments on NCUA Proposed Corporate Credit Union Rule
January 5, 2015 – NASCUS filed comments on NCUA’s proposed changes to Part 704, Corporate Credit Unions. In its comments, NASCUS supported NCUA’s changes to the rule as positive improvements and recommended several additional enhancements. In particular, NASCUS noted that proposed changes to the definitions of corporate credit union capital contained implicit retained earnings requirements. While NASCUS agreed that emphasizing retained earnings over capital built primarily on perpetual contributed capital (PCC), the structure of the proposed calculation of regulatory capital remains cumbersome.
NASCUS also urged NCUA to consider extending the permissible term for secured borrowing to provide corporate credit unions greater flexibility to manage seasonal liquidity flows. NCUA proposed extending the permissible term for some borrowings from the current 30 day limit to 120 days. NASCUS recommended a longer term for well managed corporates.
NASCUS also submitted some suggestions for technical corrections to NCUA’s drafting of the proposed rule. NASCUS’ comment letter may be read here.