On December 21, 2023, Blue Federal Credit Union, a federally chartered credit union headquartered in Cheyenne, Wyoming, successfully completed a private placement of $15.0 million of subordinated notes. The subordinated notes are intended to qualify as subordinated debt under NCUA rules and are considered regulatory capital in the calculation of Blue Federal Credit Union’s net worth ratio and risk-based capital ratio.

Luse Gorman served as legal counsel to Blue Federal Credit Union in the offering. The Luse Gorman team consisted of Jeff Cardone, Michael Brown, Ellie Cook and Babette Schwartz.

Since January 1, 2022, newly effective NCUA rules have expanded credit union access to regulatory capital by permitting credit unions with at least $500 million in assets and new credit unions to issue subordinated debt.  Low-income designated credit unions (regardless of their asset size) are also permitted to issue subordinated debt.  Luse Gorman has prepared a memorandum summarizing the new NCUA rules.

To learn more about credit union capital raises, please contact Jeff Cardone, Michael Brown or Ellie Cook.