… Sub debt reg tweaked to allow ECIP participation …
(Dec. 17, 2021) A final regulation tweaking the agency’s subordinated debt rule by amending the definition of “Grandfathered Secondary Capital” to include any secondary capital issued to U.S. government or one of its subdivisions under an application approved before January 1, 2022, irrespective of the date of issuance, was also approved by the board.
NCUA said the change will benefit eligible low-income credit unions that are either participating in the Treasury Department’s “Emergency Capital Investment Program” (ECIP) or other programs administered by the federal government that can be used to fund secondary capital, “if they do not receive the funds for such programs by Dec. 31.”
The final rule also provides that the expiration of regulatory capital treatment for these issuances is the later of 20 years from the date of issuance or Jan. 1, 2042.
NASCUS, in its comment letter on the proposal (submitted in October) recommended that “a basic sunset provision could provide compatibility between the Subordinated Debt rule and the rules of qualifying government funding program.”
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