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NCUA approves new NGN committee technical changes
ALEXANDRIA, Va. (8/30/11)--Management and oversight of the National Credit Union Administration’s (NCUA) NCUA Guaranteed Notes (NGN) program will soon be handled by the NGN Securities Management and Oversight Committee, which was approved by NCUA board members during Monday’s August board meeting. The committee’s duties include monitoring the performance of the NGNs and their underlying collateral, ensuring the program’s compliance with legal and accounting requirements, and maintaining the NGN Program’s transparency to credit unions and other key stakeholders. The agency said the new committee is being established to minimize the NGN Program’s long-term costs. A total of $200,000 in 2011 funding was approved to set up the committee, which will consist of the directors of the NCUA’s Asset Management and Assistance Center, Office of Examination and Insurance, and Office of the Chief Financial Officer. Five NCUA staff members and various outside consultants will also work with the committee. NCUA Deputy Executive Director Larry Fazio will lead the committee at first. A total of $12.3 million will be spent on the committee in 2012, with $1.3 million going to cover employee pay and benefits costs, $6.5 million paying for consulting fees, and $2.75 million being used for vendor payments. A total of $815,000 will be spent on software and $730,000 will cover legal expenses. The agency stressed that the committee will not need approval for new funding, and that a separate assessment will not be needed to fund the group. All costs will be handled through the Temporary Corporate Credit Union Stabilization Fund, and committee funding has already been figured into the NCUA’s corporate resolution cost estimates. The NCUA said that the committee will perform its work for a minimum of 10 years. The agency during Monday’s august board meeting also proposed amendments and clarifying changes to its corporate credit union rule, Part 704. The proposed changes, which will be open for public comment for 30 days, amend NCUA regulations to exclude Central Liquidity Facility (CLF) stock subscriptions from the definition of net assets. The proposal also clarifies that violations of the weighted average life of a corporate’s assets are not subject to capital category reclassification. The proposal would require the preparation of investment action plans for such violations. These changes were made to “relieve regulatory burden where warranted” and ease access to liquidity, the NCUA said. For more on the NCUA’s August board meeting, use the resource link.
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