The National Credit Union Administration (NCUA) Board has unanimously approved a rule to amend various parts of the NCUA’s regulations, which will permit low-income designated credit unions, complex credit unions and new credit unions to issue subordinated debt for purposes of regulatory capital treatment.
The rule, set to go into effect January 1, 2022, will make the following changes:
Amending the definition of accredited investor
Providing a longer timeframe in which a credit union may issue subordinated debt after approval
Reducing the required number of years of pro forma financial statements an issuing credit union must provide with its application
Clarifying the prohibition on subordinated debt issuances outside of the United States
Clarifying that the NCUA Board will publish a fee schedule only if it makes a determination to charge a fee
To understand how this rule may impact your credit union, please contact Doeren Mayhew’s Financial Institutions Group.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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