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News Now

Washington
CUNA Matz alt capital letter invaluable to talks
WASHINGTON (12/9/09)— As the Credit Union National Association (CUNA) continues to push for change on key credit union issues including alternative capital, clear support for such capital as articulated by the chief federal regulator will be an invaluable addition to that effort, the trade group said Tuesday. CUNA has been aggressively pursuing credit union reforms through meetings with top Obama administration officials and federal legislators. CUNA President/CEO Dan Mica commended National Credit Union Administration Chairman Debbie Matz for her letter Monday to House Financial Services Committee Chairman Barney Frank (D-Mass.). Mica said the letter clearly draws the connection between increased credit union service to the American public and the need for prompt corrective action (PCA)reform and additional sources of capital for credit unions. Regarding PCA changes, the Matz letter informed Frank that in some instances healthy credit unions are finding it necessary to refuse new deposits because the increase is skewing net worth levels under current PCA rules. "In effect, the reward for their success in attracting new shares is the risk of a demotion to a lower net worth category if accepting those shares drives down the credit union's net worth ratio," Matz wrote, adding that the reputational risk of that situation is having a “chilling effect” on some credit union service. She urged changes to PCA that would mitigate that affect. CUNA’s Mica said, “Chairman Matz has precisely and quickly defined the negative impact current capital rules are having on consumers at a time when increased savings is vital. She has also taken a leadership role on alternative capital. CUNA commends her for her timely letter to federal lawmakers as they consider broad financial institution regulatory reforms.”


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