NCUA to Fast Track Alternative Capital for CUs

The Credit Union Journal is reporting that the National Credit Union Administration (NCUA) may fast track a proposal to give complex credit unions access to alternative capital.

Complex credit unions have at least $500 million in assets and are subject to the agency's risk-based capital requirement, which will become effective on January 1, 2020. 

The agency on December 13 approved a report calling for action on alternative capital by May of 2019.

Currently, only low-income credit unions have the authority to issue secondary or alternative capital.

While granting credit unions access to alternative capital will generate strong support from the credit union trade associations, the proposal, when issued, will also fuel vehement opposition from banking trade groups.

Alternative capital could become the Pandora's Box for credit unions. Once opened, it will become a curse for the credit union industry.

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