ALEXANDRIA, Va. (11/30/12)--Final rules addressing credit rating use alternatives and fidelity bond and insurance coverage for federally insured credit unions are among the items on the National Credit Union Administration's (NCUA) December open board meeting agenda.
Community charter conversion requests from Focus FCU, Toledo, Ohio, and The Atlantic FCU, Kenilworth, N.J., will be discussed during the meeting. The agency's Temporary Corporate Credit Union Stabilization Fund budget will also be addressed during the final open board meeting of 2012.
The NCUA open board meeting is scheduled to begin at 10:00 a.m. ET on Dec. 6.
The NCUA last spring released a proposal that would prohibit credit unions from relying on credit ratings to assess credit risk. Under that proposal, securities would not be assigned a specific grade, such as AA, A, or BB, to be a permissible investment. The securities would instead need to satisfy a narrative standard on credit quality. This credit rating replacement was required by the Dodd-Frank Wall Street Reform Act.
The Credit Union National Association (CUNA) in a comment letter said it was concerned with the potential unintended effects of the NCUA's credit rating alternative proposal. "Credit ratings can be useful to credit unions as part of a comprehensive approach to assessing credit risk," CUNA wrote. The CUNA comment letter urged the NCUA to consider permitting credit unions to rely on credit ratings as long as the credit union also conducts further reasonable and appropriate due diligence.
The closed portion of the December meeting will feature a creditor claim appeal. Termination of investment pilot programs and personnel matters will also be discussed.
For the full NCUA agenda, use the resource link.