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News Now

Washington
Mo. league relates states CU concerns to NCUA
ALEXANDRIA, Va. (8/30/10)--The Missouri Credit Union Association’s (MCUA) recent board resolution on key credit union issues resulted in a letter to the National Credit Union Administration (NCUA), which related credit union concerns regarding such things as merger policy and share insurance assessments. “The resolution, passed unanimously by the MCUA board, makes a strong statement that there is concern over NCUA actions and their effect on the sustainability of the credit union system in this stressed economy,” said Rosie Holub, MCUA president/CEO, of the board action. “Our hope is that the agency will respond positively and act within their statutory and discretionary authority to minimize the impact of the assessments on credit unions.” In its letter to the NCUA earlier this month, the Missouri association strongly urged the NCUA to allow the maximum time period for restoration of the equity ratio for the National Credit Union Share Insurance Fund and the corporate stabilization fund through assessments. Holub wrote such action is needed to “preserve the ability of credit unions to financially recover” in the face of economic woes and increased strain on credit union income and capital from legislative initiatives, which will results in a string of new regulations, the “negligible investment interest rate environment, and declining loan demand,” which the association predicts will continue for the “foreseeable future.” On the topic of mergers, the MCUA letter noted Missouri credit unions’ concern that mergers are approved without adequate coordination with stakeholders. Holub reminded the NCUA that for mergers of state-chartered credit unions, state leagues and state regulators can be a valuable resource in understanding “membership base and service needs within the immediate vicinity...[and] regional culture.” “We urge that priority be given to proximity and in-state merger acquirers within your due diligence process,” the letter said. Addressing “supervisory issues and actions,” in broader strokes, the MCUA letter said recent actions by the NCUA “appear to be less operationally constructive to survival of credit unions and, in effect, more punitive.” “We urge the agency to ensure that the examination staff is acting consistently with the directives of the NCUA board in assessing and implementing enforcement actions,” the letter stated.


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