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NCUA gets tough on secondary capital


first_img continue reading » ShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr You can be forgiven for wondering if NCUA woke up on the wrong side of the bed when it decided to issue its 23 page guidance to its staff detailing the minimum standards they must use when evaluating the proposed uses of secondary capital by Low-Income Credit Unions (LICUs). Since 1996, secondary capital has been authorized for LICUs to enable them to better serve low-income communities where it may be difficult to raise funds by solely relying on membership growth. In contrast, it is clear after reading this guidance that NCUA has grown weary of how this capital has been used. The bottom line, get ready for some extensive work if you are hoping to incorporate secondary capital into your credit union plans.Since it has been a while since I’ve blogged on this, let’s go over the basics. LICUs are credit unions, the majority of whose membership is comprised of members with a family income at or below 80% of the Federal Poverty Level. Secondary capital is a type of subordinated debt offered by a LICU to non-member organizations and businesses that can be used for capital. The key is that it is uninsured and must have a maturity of at least five years.When the authority was originally granted to credit unions, they didn’t even have to get prior approval from the NCUA. My, how times have changed. Starting in 1996, NCUA had to grant approval of secondary capital plans and now this regulation, I mean guidance, imposes detailed planning requirements and underscores the broad power that regional examiners have to reject such plans or insist on modifications in the name of safety and soundness. For example, in addition to the already extensive list of criteria that credit unions must submit with their capital plans pursuant to Section 701.34, NCUA sites its “implicit” safety and soundness authority pursuant to put credit unions on notice that it can demand that they provide information over and above that which is mandated by the regulations. For example, “the NCUA expects LICUs to provide supporting due diligence documentation that adequately captures all aspects of the financial strategies associated with the deployment of secondary capital in the plan.”last_img read more


Springfield quick to resume racing Saturday night


first_imgSPRINGFIELD, Mo. – The Quick-Quarter of the Springfield Raceway will be back in action Saturday night, Sept. 14 after taking off last weekend for the IMCA Speedway Motors Super Nationals fueled by Casey’s.  The tight IMCA Modified point battle between James Thompson and Jody Tillman will resume. Look for three-wide action as the Quick Quarter never seems to disappoint especially in IMCA Modified action every Saturday Night. On Saturday, Sept. 21 during the Under The Lights Special Tribute race to the Ozarks Legends, the Bad Boy Mowers IMCA Modifieds will be racing for a $500 to win and $100 to start feature By Ronnie Williamslast_img