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Can you summarize 12 CFR Chapter VII, Subchapter A?
NATIONAL CREDIT UNION ADMINISTRATION > REGULATIONS AFFECTING CREDIT UNIONS
Short Summary
The provided legal document content covers various aspects related to capital adequacy, prompt corrective action, capital planning and stress testing, subordinated debt, grandfathered secondary capital, regulatory capital, and CECL transition provisions for credit unions. These documents govern the capital requirements and supervisory actions for federally insured credit unions, whether federally- or state-chartered, as well as new and complex credit unions. They establish a framework of minimum capital requirements and supervisory actions to restore and improve the capital adequacy of credit unions. The documents also outline the criteria for classifying credit unions based on their net worth ratio, risk-based capital ratio, and complex credit union leverage ratio (CCULR). They specify mandatory and discretionary supervisory actions that credit unions must take based on their capital classification, including increasing net worth, submitting net worth restoration plans, and restricting asset growth. The documents provide guidelines for calculating risk-based capital ratios and offer an alternative framework, the CCULR, for qualifying complex credit unions. Additionally, the documents address the filing and approval of Net Worth Restoration Plans (NWRP) for undercapitalized, significantly undercapitalized, or critically undercapitalized credit unions. They emphasize the importance of full and fair disclosure of credit unions’ financial condition and provide requirements for payment of dividends and interest refunds. The documents also cover the recognition and mitigation of credit risk in derivative contracts entered into by credit unions. Furthermore, the documents govern the capital planning and stress testing requirements for covered credit unions with assets of $10 billion or more. They outline the framework and definitions for capital planning and stress testing, including the development and maintenance of capital plans based on financial data. The documents also specify the requirements for conducting stress tests and the NCUA’s action on capital plans submitted by different tiers of credit unions. Additionally, the documents govern the requirements applicable to Subordinated Debt and Grandfathered Secondary Capital issued by credit unions. They outline the eligibility requirements, restrictions, and characteristics of Subordinated Debt and Subordinated Debt Notes, as well as the treatment of Subordinated Debt as Regulatory Capital. The documents also address the requirements and conditions for Grandfathered Secondary Capital and the establishment and maintenance of reserves. Lastly, the documents cover the CECL transition provisions for credit unions, including eligibility criteria and the calculation of the CECL transitional amount. They also specify the adjustments to retained earnings and total assets during the transition period. No specific exemptions or penalties are mentioned in the provided documents.
Whom does it apply to?
These documents apply to federally insured credit unions, whether federally- or state-chartered, as well as new and complex credit unions.
What does it govern?
The provided legal document content covers various aspects related to capital adequacy, prompt corrective action, capital planning and stress testing, subordinated debt, grandfathered secondary capital, regulatory capital, and CECL transition provisions for credit unions.
What are exemptions?
No specific exemptions or penalties are mentioned in the provided documents.
What are the Penalties?
No specific penalties are mentioned in these documents.
Jurisdiction
U.S. Federal Government