Rep. Denny Heck to Co-Sponsor Supplemental Capital Bill

U.S. Rep. Denny Heck became the first member of the Washington delegation to add his name to the Capital Access for Small Businesses and Jobs Act this week, saying “supplemental capital lets us avoid the perverse situation of successful credit unions having to turn away deposits.”

“I’m glad to be a cosponsor of this important legislation,” Heck says. “Credit unions are an important option for consumers, and we’re better off for having more choices. All other cooperative business models have access to supplemental capital, and credit unions should as well. I’d like to thank NWCUA and CUNA for helping put together a bill that does good things, without sticking partisan poison pills into it.”

The so-called supplemental capital bill, HR 719, was introduced by Reps. Peter King (R-N.Y.) and Brad Sherman (D-Calif.) and referred to the House Committee on Financial Services in February. It currently has more than 40 co-sponsors, including Oregon Democrats Earl Blumenauer and Suzanne Bonamici.

“Northwest credit unions are fortunate to have members of Congress who understand the unique structure of credit unions and the unique needs that come along with it,” says Jennifer Wagner, NWCUA’s vice president for legislative advocacy. “We thank Congressman Heck for his support on this issue, and for his continued leadership on the House Financial Services Committee.”

Under current law, credit unions (except for those designated as corporate or low income) must maintain a net worth ratio—retained earnings as a percentage of total assets—of at least 7 percent to be considered “well capitalized.” Accepting new share deposits without simultaneously growing retained earnings could throw off that ratio and trigger a slew of restrictions.

HR 719 would allow credit unions to supplement their retained earnings with other forms of capital that wouldn’t be insured by the NCUA’s Share Insurance Fund and would be subordinated to other claims. Under the measure, credit unions could accept non-share capital accounts and could use the money to cover operating losses in excess of its retained earnings. The accounts would be subject to maturity limits set by a credit union’s board. 

The measure would give the NCUA the power to determine whether a credit union is “sufficiently capitalized and well-managed” to be eligible to accept the capital. Last year, NCUA Chairman Debbie Matz wrote lawmakers that allowing credit unions to accept supplemental capital would let “well-managed credit unions better manage net worth levels under varying economic conditions.”


Questions? Contact Gary Stein: 503.350.2216,

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