WASHINGTON (2/10/09)—The Credit Union National Association (CUNA) Corporate CU Task Force will meet here this week to continue to develop and flesh out alternative funding plans for a corporate credit union stabilization plan. CUNA maintains that there is no “silver bullet” approach—no single answer—to the challenge of providing adequate money for the National Credit Union Administration’s corporate liquidity program. CUNA has warned, however, that the current plan to assess a 2009 share insurance premium on credit unions could put too much pressure on a system that is already coping with tough economic conditions. At its Thursday session, the CUNA task force will continue to flesh out a series of alternatives that CUNA has urged lawmakers and regulators to consider. These alternate funding solutions, CUNA has said, would provide the needed support to the corporates while mitigating costs to credit unions. They include:
* Long-term deposits from CUs into corporates; * Use of Central Liquidity Facility (CLF) funds to loan to the National Credit Union Share Insurance Fund (NCUSIF), and seek legislation to allow funding directly to the corporates; * Tap the U.S. Treasury Department’s Troubled Asset Relief Program (TARP) for back-up assistance to the NCUSIF; * Assess the premium assessment in stages; * Expand the “CU System Investment Program (CU SIP) to make it more attractive to credit unions; * Address accounting issues that could allow the NCUSIF to recognize the premium expense over time, thus giving credit unions some flexibility on when they must accent for these expense: and * Allow natural person CUs to purchase corporates’ troubled assets.
In addition to developing the options above, the CUNA task force will be taking a fresh look at additional options, including those proposed recently by credit unions. Use the resource links below for a CUNA compendium of resources.