Subordinated Debt

Title: Subordinated Debt
Subject: Subordinated debt; secondary capital
Agency: NCUA
Final rule

The NCUA Board (Board) is amending the Subordinated Debt rule, which the Board finalized in December 2020 with an effective date of January 1, 2022. This final rule amends the definition of “Grandfathered Secondary Capital” to include any secondary capital issued to the United States Government or one of its subdivisions (U.S. Government), under a secondary capital application approved before January 1, 2022, irrespective of the date of issuance. This amendment will benefit eligible low-income credit unions (LICUs) that are either participating in the U.S. Department of the Treasury’s (Treasury) Emergency Capital Investment Program (ECIP) or other programs administered by the U.S. Government that can be used to fund secondary capital, if they do not receive the funds for such programs by December 31, 2021. The Board is also amending the Subordinated Debt rule by extending the expiration of regulatory capital treatment for the aforementioned secondary capital issuances to the later of 20 years from the date of issuance or January 1, 2042.

FR Doc: 2021-27643
Date proposed: Sept. 23, 2021
Comments due date: Oct. 28, 2021
Effective date:

Jan. 1, 2022

Rule compliance date:
Agency release:
Related Reg Report item(s):

Proposal gives some credit unions more room to participate in subordinated debt