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ABA: The American Bankers Association
Statement

ABA Statement on NCUA's Subordinated Debt Rule

“The NCUA’s disappointing decision to allow large credit unions that already benefit from a federal tax-exemption to issue subordinated debt to sophisticated, for-profit investors will only fuel their increasing market-share, crowding out smaller credit unions and community banks. This rule is inconsistent with the chartered mission of credit unions to serve people of modest means and provides no demonstrable requirements credit unions actually serve those in need.

It's also troubling that the NCUA’s own budget acknowledges that it currently lacks the expertise to oversee these sophisticated financial instruments and the agency will have to bring in outside counsel to fulfill its supervisory responsibilities. Congress should be concerned about this latest step by NCUA to further blur the lines between large credit unions and tax-paying banks, while adding a new layer of risk at precisely the wrong time. We will consult with our members before deciding next steps.”

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About the American Bankers Association

The American Bankers Association is the voice of the nation’s $22.8 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard nearly $19 trillion in deposits and extend $11 trillion in loans.

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