What need's fixing?
Treasury has indicated ECIP funding will not occur until 2022. NCUA has a corresponding rule that sunsets at the end of 2021 and a new rule that starts in 2022.
The problem lies in the transition from the old rule to the new rule:
If you have NCUA approval this year but your secondary capital is NOT funded by year end 2021 you need to again seek NCUA approval.
I expect the proposed rule will clarify how this is handled, or better yet cancel the need for re-approval.
Hopefully NCUA treats the ECIP funds the same as all other Sub Debt/ Secondary Capital.
This would seem logical, as the new rule's purpose was to require sub debt be treated as a security, so as to enhance the required documents provided to investors.
Lastly, as it relates to the ECIP program - Treasury is allowing maturities of 30 years for the ECIP funds. NCUA rules limit the maturity to 20 years.
Will NCUA allow for 30 year maturities for ECIP and other Sub Debt/ Secondary Capital?
I certainly hope so. Tune in to the Board Meeting Thursday to find out.