Missouri's Clay Cosponsors Supplemental Capital Bill - Credit Union Call to Action
Missouri’s U.S. Rep. William Lacy Clay (D-District 1) has signed on as a cosponsor to the newly introduced supplemental capital legislation - H.R. 3993, the Capital Access for Small Business and Jobs Act. Representatives Peter King (R-NY) and Brad Sherman (D-CA) introduced the bill on February 9. Clay agreed to sign on as a cosponsor that same day. Missouri credit union representatives met with Clay’s staff in Washington, D.C. and urged support of the supplemental capital bill on February 8. As a member of the House Financial Services Committee, Congressman Clay’s support as a cosponsor is good news for this effort.
“We are thrilled to see Congressman Clay sign onto this important piece of credit union legislation,” says Mike Beall, Missouri Credit Union Association president/CEO. “We will be working with other members of Missouri’s delegation to urge them to join Congressman Clay as cosponsors.”
Call to Action
Credit union presidents, staff members and board members are asked to help communicate the need for H.R. 3993 and urge support from the rest of the Missouri delegation.
Take action today by visiting the national Credit Union Grassroots Action Center and contacting your U.S. Representative. This also provides an opportunity to thank Congressman Clay for his support. The direct link is: http://capwiz.com/cuna/issues/alert/?alertid=60980226&PROCESS=Take+Action
Supplemental Capital – H.R. 3993 Background
The Capital Access for Small Business and Jobs Act would provide credit unions with the appropriate ability to raise capital from sources other than retained earnings while maintaining the “one member, one vote” principle the credit union ownership structure is based. Further, it would improve the safety and soundness of credit unions by allowing them to develop a supplemental cushion to reduce risk to the National Credit Union Share Insurance Fund.
The objective of H.R. 3993 is to:
- Rectify a flaw in the 1998 Credit Union Membership Access Act that is discouraging manageable asset growth by financially healthy credit unions;
- Ensure credit unions can continue to accept new deposit shares – even during tough economic times when demand for loans and other income-generating services are low;
- Allow credits unions to help keep private sector credit flowing at affordable rates even in recessionary times; and
- Provide the credit unions’ regulator, National Credit Union Administration (NCUA), with the same authority and flexibility to adjust capital requirements in response to changes in economic conditions as Congress has provided to federal banking regulators.
The bill achieves these goals by allowing credit unions to access supplemental forms of capital. Specifically, this legislation would permit the National Credit Union Administration (NCUA) to allow credit unions to accept other forms of capital, provided that it does not alter the cooperative ownership structure of credit unions. The legislation requires that this capital be uninsured and subordinate to other claims against the credit union. Further, the bill authorizes the NCUA to set maturity limits on this capital and restrict the ability to raise supplemental capital to credit unions which are sufficiently capitalized and well managed.
Click here to see more detail on the bill.