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Subordinated Debt

NCUA · final-rule · Published 2023-03-27 · Effective 2023-04-26 · 88 FR 18006

Document

Document number
2023-05808
Federal Register citation
88 FR 18006
CFR reference
12 CFR 702
Type
Rule
Action
Final rule.
Category
final-rule
Agency
US National Credit Union Administration
Publication date
2023-03-27
Effective date
2023-04-26

Abstract

The NCUA Board (Board) is amending the Subordinated Debt rule (current rule), which it finalized in December 2020 with an effective date of January 1, 2022. This final rule makes two changes related to the maturity of Subordinated Debt Notes and Grandfathered Secondary Capital. Specifically, this final rule replaces the maximum permissible maturity of Subordinated Debt Notes with a requirement that any credit union seeking to issue Subordinated Debt Notes with maturities longer than 20 years demonstrate how such instruments would continue to be considered "debt." This final rule also extends the Regulatory Capital treatment of Grandfathered Secondary Capital to the later of 30 years from the date of issuance or January 1, 2052. This extension will align the Regulatory Capital treatment of Grandfathered Secondary Capital with the maximum permissible maturity for any secondary capital issued by low-income credit unions (LICUs) under the 2022 U.S. Department of the Treasury's (Treasury) Emergency Capital Investment Program (ECIP) or other programs administered by the U.S. Government. In addition, the Board is making four minor modifications to other sections of the current rule to make it more user-friendly and flexible.

Source

Authoritative
Federal Register document
Machine
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