As Prepared for Delivery on December 16, 2021
Thank you, Justin, Rick, and the rest of the team, including the Offices of Examination and Insurance, General Counsel, Chief Economist and Credit Union Resources and Expansion and others, for this update. This felt like a real team effort.
I urged CDFI-certified credit unions and minority depository institutions (MDIs) to take advantage of this funding when the Emergency Capital Investment Program was first publicized. Among many other benefits, it raises the visibility of credit unions in underserved communities. In times of crisis, credit unions are there for their members. For CDFI and MDI credit unions, it is more than providing financial services. CDFI and MDIs go beyond the members to engage with community leaders, coordinate with businesses and create coalitions to support those in need. It is a vivid demonstration of the power of cooperation in our communities. Assuring this funding can be treated as grandfathered secondary capital will help CDFI and MDI credit unions do that.
The delay in funding approved applications created a challenge for credit unions and the agency. Under our current subordinated debt rule, those funds would not be grandfathered in as secondary capital but be treated as subordinated debt. With the adjustment today, credit unions whose secondary capital applications are approved by the NCUA in 2021 will be able to treat those funds as grandfathered secondary capital. This is welcome news.
I’m grateful to staff for this solution and for the ongoing effort to shepherd credit union applications through Treasury.
Thank you, Mr. Chairman, this concludes my remarks. I do have a couple of questions.
Question: When do credit unions need to get NCUA approval to take advantage of the program? Do you have any advice for credit unions on the application process?