WASHINGTON—Supplemental capital legislation was reintroduced in the House Friday.
Reps. Peter King (R-N.Y.) and Brad Sherman (D-Calif.) are lead sponsors of a bill that addresses the critical issue of supplemental capital for credit unions.
King and Sherman were chief sponsors of similar legislation last Congress—H.R. 719, the “Capital Access for Small Businesses and Jobs Act.” The new bill has yet to be assigned a number.
“Supplemental capital is even more important now with the prospect of NCUA’s second risk-based capital proposal, which could force some credit unions to shoulder a disproportionate amount of burden for the safety and soundness of the credit union industry,” said NAFCU VP of Legislative Affairs Brad Thaler.
“We appreciate the support Reps. King and Sherman continue to show the credit union industry,” said Thaler, adding that capital reform is a key element of NAFCU’s five-point plan for credit union regulatory relief. “We thank them and the bill’s cosponsors for championing legislation that would further credit unions’ ability to operate effectively within the financial marketplace and ensure superior service to their members.”
CUNA President and CEO Jim Nussle praised King and Sherman for reintroducing the legislation.“We believe your legislation would provide credit unions with appropriate ability to raise capital from sources other than retained earnings without putting in jeopardy the ‘one member, one vote’ principle that is the bedrock of the credit union ownership structure,” said Nussle. “Supplemental capital could play an even more significant role for credit unions, if NCUA’s proposed risk-based capital rule is adopted. Your legislation could provide credit unions with access to the additional capital they need to continue to lend and serve their members in a safe and sound manner.”
The bill’s cosponsors are Reps. Suzanne Bonamici (D-Ore.), Chris Collins (R-N.Y.), Richard Hanna (R-N.Y.), Dennis Heck (D-Wash), Jared Huffman (D-Calif.), Steve Israel (D-N.Y.), Walter B. Jones (R-N.C.), Gregory W. Meeks (D-N.Y.), Grace Napolitano (D-Calif.), Eleanor Holmes Norton (D-D.C.), Chellie Pingree (D-Maine), Bill Posey (R-Fla.), Adam B. Schiff (D-Calif.), and Brad Sherman (D-Calif.).
The fact that a debate is emerging now about what capital should look like across the entire financial system gives this bill a better chance of passing than its predecessor, said Thaler. “It’s an uphill battle, but given the environment that we are in with NCUA’s risk-based capital proposal magnifying the need for capital reform, this will probably have a more serious debate in this Congress.”