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Posey latest co-sponsor of Supplemental Capital legislation

Legislation to allow credit unions access to alternative forms of capital gained a second co-sponsor from Florida. Rep. Bill Posey (R-FL) joins Rep. Jeff Miller (R-FL) as two of 24 co-sponsor to H.R. 3993. Capital Access for Small Businesses and Jobs Act.

Most credit unions are only able to use retained earnings to increase capital. However, H.R. 3993 would allow supplemental capital to count toward a credit union’s net worth which would help credit unions serve the needs of their members. Credit unions by law, not regulation as is the case for other insured depositories, must maintain a 7-percent net worth ratio in order to be considered “well capitalized.” The law also specifies that only retained earnings constitute net worth for credit unions. All other U.S. depository institutions and most credit unions in other countries are permitted various forms of alternate or supplemental capital.

At the 2012 CUNA GAC, NCUA Chairman Debbie Matz said the agency is behind credit unions having access to supplemental capital. H.R. 3993 currently is in committee.