WASHINGTON—NAFCU is expressing support for proposed changes to the NCUA’s subordinated debt rule.
The trade group noted the proposed amendments align with two requests it had made earlier: to extend the treatment of Emergency Capital Investment Program (ECIP) funds as regulatory capital to reflect the maximum permissible maturity of the note, and to eliminate the 20-year maximum maturity limit in favor of a more flexible test.
In the letter, Senior Counsel for Research and Policy Andrew Morris offered support for the “NCUA’s decision to eliminate the maximum maturity requirement in the subordinated debt rule and replace it with a more reasonable standard which considers whether an issued note is debt.” Additionally, NAFCU said it “appreciates the board’s decision to adjust the regulatory capital treatment of [grandfathered secondary capital] to fully accommodate the maximum permissible maturity of notes issued under [the Treasury’s ECIP].”
Morris also noted NAFCU’s support of changes and clarifications to alleviate what the group said is the administrative burden for credit unions under the subordinated debt rule.
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