12 CFR § 702.407 - Discounting of amount treated as Regulatory Capital.

---
identifier: "/us/cfr/t12/s702.407"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "12 CFR § 702.407 - Discounting of amount treated as Regulatory Capital."
title_number: 12
title_name: "Banks and Banking"
section_number: "702.407"
section_name: "Discounting of amount treated as Regulatory Capital."
chapter_name: "NATIONAL CREDIT UNION ADMINISTRATION"
subchapter_number: "A"
subchapter_name: "REGULATIONS AFFECTING CREDIT UNIONS"
part_number: "702"
part_name: "CAPITAL ADEQUACY"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "12 U.S.C. 1757(9), 1766(a), 1784(a), 1786(e), 1790d."
regulatory_source: "65 FR 8584, Feb. 18, 2000, unless otherwise noted."
cfr_part: "702"
---


# 702.407 Discounting of amount treated as Regulatory Capital.

The amount of outstanding Subordinated Debt that may be treated as Regulatory Capital shall reduce by 20 percent per annum of the initial aggregate principal amount of the applicable Subordinated Debt (as reduced by prepayments or amounts extinguished to cover a deficit under § 702.404(a)(6)), as required by the following schedule:

Table 1 to § 720.407

| Remaining maturity | Balance treated asregulatory capital% |
| --- | --- |
| Four to less than five years | 80 |
| Three to less than four years | 60 |
| Two to less than three years | 40 |
| One to less than two years | 20 |
| Less than one year | 0 |