A proposed rule on subordinated debt will be on the agenda of the federal credit union regulator’s board when it meets Sept. 23, according to an agenda published Thursday by the agency.
According to the agenda posted on its website, the National Credit Union Administration (NCUA) Board will consider a rule on the capital tool of subordinated debt under parts 702 (capital adequacy) and 703 (investment and deposit activities) under its regulations.
Late last year, the agency adopted a final rule on subordinated debt allowing well-capitalized, federally insured credit unions to count the debt instrument as capital for risk-based net worth purposes. The final rule ultimately published in January is slated to take effect Jan. 1, 2022. That date is the same that new risk-based capital rules for credit unions are to take effect.
The rule also grandfathered any secondary capital issued before the rule’s effective date of Jan. 1, and it preserves that capital’s regulatory capital treatment for 20 years after the effective date. The “grandfathered secondary capital” generally, the agency said, remains subject to requirements in the agency’s current secondary capital rule.
Also on the agenda for the board’s meeting next week are:
- A quarterly report on the National Credit Union Share Insurance Fund;
- A review of the business loan rule for Oregon credit unions (to determine if the state rule covers all the provisions in the NCUA rule and is no less restrictive, thus exempting credit unions in the state from compliance);
- A 2021 mid-session budget review; and
- An item merely listed as “NCUA Board Agenda”; no other information is given.
The board meeting is scheduled to get underway at 10 a.m. ET and will be streamed live via the Internet.