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News Now

Washington
NCUA advisory addresses changes to Corporate CU Share Guarantee Program
ALEXANDRIA, Va. (4/27/09)--The National Credit Union Administration (NCUA) Board Friday issued another media advisory to provide information on recent changes to the Temporary Corporate Credit Union Share Guarantee Program. In its Weekly Corporate Credit Union Update, NCUA said it would permit corporate credit unions to use the capital level as reported on their Nov. 30, 2008, NCUA 5310 Call Report to determine regulatory compliance with capital-based requirements and regulations in the corporate rule. “We believe this will allow corporate credit unions to continue to meet members’ needs while also ensuring corporates do not take additional undue risk,” said NCUA Chairman Michael Fryzel. However, the Office of Corporate Credit Unions (OCCU) director has the authority to restrict or modify this general waiver for a particular corporate credit union based on safety and soundness considerations. The update states that NCUA anticipates the March 2009 call reports of “some corporate credit unions will reflect losses that will be absorbed by capital." The Credit Union National Association is working to obtain information from NCUA on this assessment. The NCUA board also authorized extensions of the program through December 2012, which was set to expire Dec. 31, 2010. “There is concern that a significant amount of shares may be scheduled to mature on the Program expiration date--leading to an unintended negative impact on liquidity. Going forward, there will be a quarterly reassessment of the liquidity needs in the corporate system, and if it is determined the need exists, the program will be extended,” NCUA said. If the extensions are granted, the final guarantee will expire on Dec. 31, 2014. All corporate credit unions can participate in the modified program.


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