The NCUA board in January will take the first steps toward considering a plan to allow credit unions to raise supplemental capital, but staff members warned that the proposal is fraught with potential stumbling blocks.
The board agreed on Thursday to issue a notice of proposed rule-making in January. That will allow stakeholders to comment on the proposal before proposed rules are issued, which would give stakeholders another opportunity to comment.
Credit unions have said that their growth is hampered by the inability to raise supplemental capital.
NCUA Director of the Office of Examination and Insurance Larry Fazio told the board that allowing credit unions to raise supplemental capital could have implications for the tax-exempt status of those institutions. He said that in 1951, Congress changed the tax-exempt status of the thrift industry over similar issues.
He said that before any supplemental capital program is adopted, the NCUA and individual credit unions must address such issues as anti-fraud requirements, borrowing risk, and required disclosures.
NCUA Board member J. Mark McWatters said that following the notice of proposed rule-making the board might convene working groups to address some of those issues.
In other business Thursday, the NCUA board approved a plan to change the name of the agency's Office of Consumer Protection to the Office of Consumer Financial Protection and Access.
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