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Legislative Action Alert Alternative Capital Legislation Introduced in Congress – Contact Your Member of Congress Today Credit unions remain the most highly regulated and restricted of all financial institutions and are the only depository institution in the United States without the ability to issue some form of capital instruments to augment retained earnings to build capital. By law, not regulation as is the case of other insured depositories, credit unions must maintain a 7% net worth ratio in order to be considered “well capitalized.” Under current law, only retained earnings constitute net worth for credit unions. While credit unions as a whole remain well capitalized, the financial crisis has led to a number of credit unions approaching or surpassing their prompt corrective action (PCA) trigger. In addition, as credit unions continue to face additional and stronger stresses on income, alternative capital will be important for credit unions moving forward. As you read in Monday’s edition of E-Signal, last week Representative Peter King (R-NY) and Brad Sherman (D-CA) introduced the Capital Access for Small Business and Job Act, H. R. 3993, which would provide credit unions with the ability to raise capital from alternative sources. These other sources of capital would still maintain the “one member, one vote” principal that is fundamental to the credit union structure. This common sense legislation enhances safety and soundness and ensures that consumer and their communities will continue to receive support from their credit unions in the future. Please contact your Representative today and urge them to support H.R. 3993. Please take action on this very important issue by going to Supplemental Capital Action Alert. Here you can send a standard letter or draft your own encouraging your Representative to support this legislation. Representatives who are already co-sponsors of H.R. 3993 will receive a thank you message for their support. To view the letter sent by the LSCU to the Alabama and Florida Congressional delegations, click here [MIKE-INSERT LINK TO OUR LETTER]. As soon as the bill was introduced, banks began to oppose it. And while not every credit union may want to take advantage of alternative capital, once this bill is passed, nobody can be sure what the future of the market or our industry might hold. It is important that all credit unions take part in the push for this important option for credit unions. Please contact your member of the U.S. House of Representatives today and ask them to co-sponsor H.R. 3993. We need you, your staff, and your board members to all contact Congress as part of this action alert. If you have any questions, or need more information about this important bill, please contact Sr. Vice President of Governmental Affairs Will McCarty at (205) 437-2137.