NASCUS PRESIDENT & CEO LUCY ITO ON THE JANUARY NCUA BOARD MEETING

January 23, 2020

NASCUS PRESIDENT & CEO LUCY ITO ON THE JANUARY NCUA BOARD MEETING

ARLINGTON, Va. – Today, the NCUA provided notice of rulemaking on Subordinated Debt and Credit Union-Bank Transactions.

NASCUS President and CEO Lucy Ito issued the following statements in response to today’s meeting.

On the proposed rule on Subordinated Debt:

“We are pleased that the NCUA Board is considering a subordinated debt rule. NASCUS has long held that subordinated debt should be a tool for well-managed credit unions to meet risk-based capital requirements and as an additional line of defense to protect the National Share Insurance Fund (NCUSIF). We appreciate Board Member McWatters’s continued efforts to bring subordinated debt to the NCUA Board table and we applaud Chairman Hood and Board Member Harper’s support for an extended comment period of 120 days which will allow state supervisory agencies and all stakeholders the opportunity to thoroughly examine the lengthy and complex proposed rule.

“We further encourage NCUA to utilize the comment period to follow past precedent and collaborate with NASCUS and state supervisory agencies. Two decades ago, NCUA, State Regulators and a NASCUS liaison successfully worked together to draft the original Prompt Corrective Action rules and implement H.R. 1151. We believe the past collaboration is a proven blueprint for the path forward.”

On Credit Union-Bank Transactions:

“A credit union makes a business decision when deciding whether to acquire a bank. The role of state regulators and NCUA is to ensure that the resulting entity from a credit union’s acquisition of a bank is safe and sound and adequately capitalized. For state-chartered credit unions, NCUA’s authority should be limited to safety and soundness concerns and should not extend to governance questions which are the purview of state regulators. We are still reviewing the proposed rule to determine its impact on the state credit union system and look forward to engaging with NCUA to offer insights, as state agencies have evaluated a greater number and variety of these transactions.”

Information Contact:

Shelton Roulhac, Vice President, Communications, [email protected]  or (703) 528-5974

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.