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NASCUS Encourages Abernathy to Support CU Capital Reforms

ARLINGTON, Va. - NASCUS President/CEO Mary Martha Fortney recently penned Treasury's Assistant Secretary for Financial Institutions Wayne Abernathy a letter reiterating its support of allowing federally-insured credit unions to augment their capital by being allowed to count supplemental capital as part of their PCA-defined "net worth" and encouraging him to...

By Staff Writer | Updated on April 06, 2004

ARLINGTON, Va. – NASCUS President/CEO Mary Martha Fortney recently penned Treasury’s Assistant Secretary for Financial Institutions Wayne Abernathy a letter reiterating its support of allowing federally-insured credit unions to augment their capital by being allowed to count supplemental capital as part of their PCA-defined “net worth” and encouraging him to support credit union capital reforms. Pointing out that other depository institutions can augment their capital base by issuing supplemental capital, “NASCUS believes that permitting credit unions to count supplemental capital as part of their PCA requirements would add to the safety and soundness of the credit union industry and the National Credit Union Share Insurance Fund,” Fortney wrote. Some state-chartered credit unions, under their state laws or regulations, have the authority to raise secondary capital. “However, as you are aware, unless the Federal Credit Union Act is amended to recognize such capital issuances, they may not be included in the federal PCA calculations,” she added. Fortney told Abernathy that NASCUS supports a risk weighted capital regime for CUs as outlined in H.R. 3579 which would reform credit union capital requirements by redefining the net worth ratio to include risk weighted assets rather than total assets and hopes Treasury will support those capital reforms for CUs as well.

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