NCUA Chartering Manual Compliant · 8.5×11 · Portrait
RISE II POWER
Community Development
Prepared For
NCUA Office of Credit Union Resources
Region III · Alexandria, VA
Confidential Charter Application Exhibit
Trillion Dollar Spending Power
Federal Credit Union
Capitalization Plan
Submitted pursuant to NCUA Chartering & Field of Membership Manual (Chapter 2)
Credit Union Identification
Executive Summary
The Trillion Dollar Spending Power Federal Credit Union (TDSP FCU) is a proposed federal credit union chartered under the authority of the Federal Credit Union Act, serving the residents of Fulton County and DeKalb County, Georgia, pursuant to a Field of Membership (FOM) approval letter issued by the National Credit Union Administration (NCUA). This Capitalization Plan demonstrates the credit union's ability to establish, maintain, and grow adequate net worth in compliance with NCUA regulations, including 12 CFR Part 702 (Prompt Corrective Action), 12 CFR Part 701.34 (Subordinated Debt), and the NCUA Chartering Manual.
The credit union has secured 3,000 membership pledges from qualifying community members and is in the process of obtaining $500,000 in seed capital through sponsor contribution and community investment. As a Low-Income Designated Credit Union (LICU), TDSP FCU will be eligible to accept secondary capital, providing a pathway to sustained capital adequacy through the critical start-up phase and beyond.
NCUA Regulatory Framework & Compliance
This plan is developed in strict accordance with the following NCUA regulations and guidance:
- 12 CFR § 702 — Prompt Corrective Action (PCA): minimum net worth ratios, classifications, and net worth restoration requirements.
- 12 CFR § 701.34 — Subordinated Debt: eligibility for Low-Income Designated credit unions to accept secondary capital.
- NCUA Chartering & Field of Membership Manual, Chapter 2 — business plan, capitalization, and pro forma financial projection requirements for new federal credit union charters.
- 12 CFR § 741 — Insurance of Accounts (NCUA share insurance).
- NCUA Letter to Credit Unions 13-CU-04 — Guidance on Secondary Capital for LICUs.
- 12 CFR § 701.32 — Member business lending (where applicable).
Initial Capitalization Structure
TDSP FCU's initial capitalization is sourced through a multi-tier structure designed to satisfy NCUA start-up capital requirements and sustain operations through projected break-even (Month 24).
| Capital Source | Amount | Classification |
|---|---|---|
| Sponsor Contribution (RISE II POWER) | $200,000 | Donated Equity (Non-Share) |
| Community Seed Investment (Grants) | $150,000 | Donated Equity (Non-Share) |
| Secondary Capital (LICU Eligible) | $100,000 | Subordinated Debt (12 CFR 701.34) |
| Founding Member Share Subscriptions | $50,000 | Regular Shares (Member Equity) |
| Total Initial Capital | $500,000 | — |
All donated equity and secondary capital shall be documented via executed agreements and placed in escrow pending charter approval, per NCUA Chartering Manual requirements.
Net Worth Requirement & Pro Forma Projections
Pursuant to 12 CFR § 702.303, a federal credit union must maintain a net worth ratio of at least 7.00% to be classified "Adequately Capitalized" and 9.00% to be "Well Capitalized." As a newly chartered credit union, TDSP FCU targets a net worth ratio significantly above the minimum from inception.
| Metric | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Total Assets | $650,000 | $1,200,000 | $2,400,000 | $4,100,000 | $6,500,000 |
| Total Net Worth | $500,000 | $485,000 | $520,000 | $610,000 | $740,000 |
| Net Worth Ratio | 76.92% | 40.42% | 21.67% | 14.88% | 11.38% |
| Members | 500 | 1,200 | 2,500 | 4,000 | 6,000 |
| Net Income (Loss) | ($15,000) | $35,000 | $90,000 | $130,000 | $185,000 |
Pro forma projections demonstrate net worth ratio compliance with PCA thresholds through Year 5, with break-even projected in Month 24. See Exhibit A (full 60-month pro forma).
Field of Membership & Membership Growth
TDSP FCU serves a defined community field of membership covering Fulton County and DeKalb County, Georgia, as approved by NCUA. The underserved designation is supported by demographic and economic data documenting the need for affordable financial services in the footprint. The credit union has received 3,000 signed membership pledges, evidencing demonstrated community demand and validating the business case for charter approval.
Pledged
3,000
Members
Footprint
2
Counties, GA
Yr 5 Target
6,000
Members
Risk Management & Contingency
TDSP FCU has established risk mitigation strategies and a net worth restoration plan in accordance with 12 CFR § 702.204, to be activated if net worth declines below the "Adequately Capitalized" threshold:
- Liquidity: Minimum 10% liquid asset ratio maintained; contingency line of credit from corporate credit union.
- Credit Risk: Conservative loan-to-share ratio (≤ 60% Years 1–3); concentration limits per loan type.
- Capital Restoration: Trigger-based plan restricting growth, dividends, and discretionary expenditures if net worth ratio falls below 7%.
- Secondary Capital Cushion: LICU eligibility provides access to additional subordinated debt if needed.
- Operating Expense Ratio: Target ≤ 4.5% by Year 3, declining to ≤ 3.5% by Year 5.
Governance & Oversight
The Board of Directors, elected from the membership, holds fiduciary responsibility for capital adequacy oversight and quarterly review of this plan. The Supervisory Committee conducts independent verification of capital accounts per 12 CFR § 701.16. The credit union will engage NCUA examination and supervision upon charter approval and maintain all required filings, policies, and records.
Certification
I certify that the information contained in this Capitalization Plan is true and accurate to the best of my knowledge, and that TDSP FCU will operate in full compliance with the Federal Credit Union Act and NCUA regulations.
Board Chair, Signature
CEO / Treasurer, Signature
TDSP FCU · Capitalization Plan · NCUA Charter Application Exhibit
November 2026 · Page 1 of 1
