Type:Rule
Citation:86 FR 10729
Reading Time:about 14 minutes
The NCUA Board has issued a final rule amending regulations for corporate credit unions. This rule clarifies that corporate credit unions are allowed to purchase subordinated debt instruments from natural person credit unions and outlines how these investments will be treated in terms of capital. The rule aims to balance providing flexibility for these transactions while minimizing systemic risk to the credit union system by requiring such debt instruments to be deducted from Tier 1 capital. This amendment takes effect on January 1, 2022.
Simple Explanation
The NCUA Board made a new rule that lets credit unions buy a special kind of loan from other credit unions, but they have to be careful how they count it as money they can use.