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NCUA Supports CU Capital Bill

The National Credit Union Administration backs a bill that would allow well-capitalized credit unions to match a growing deposit base from a growing membership with capital from sources other than retained earnings--which currently is the only type of capital that counts toward capital ratio.

Under current law, the more deposits a credit union accepts, the more its capital ratio declines. When capital ratios decline, credit unions could face prompt statute regulated corrective action by their regulator. NCUA Chair Debbie Matz pledged in a May 2 letter to Rep. Peter King (R-N.Y.), the bill's chief sponsor along with Rep. Brad Sherman (D-Calif.), that if the U.S. Congress enacts King's Capital Access for Small Business and Jobs Act (H.R. 719), her agency will "promptly propose the necessary rule changes required for implementation."

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Tags: Matz, supplemental capital, H.R. 719, NCUA

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