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NCUA removes net worth rule from todays agenda
ALEXANDRIA, Va. (7/21/11)--A proposed rule relating to credit union service organizations, corporate credit union-related accounting issues, stabilization fund borrowing, and reviewing the 2011 operating budget are on today’s National Credit Union Administration (NCUA) board meeting agenda, as is an interim final rule addressing remittance transfers. Discussion of a final rule that revises "net worth" for natural person credit unions and the "equity ratio" for the National Credit Union Share Insurance Fund (NCUSIF) will not be on the agenda of today’s NCUA open board meeting, which is scheduled to begin at 10:00 a.m. ET. The Credit Union National Association (CUNA) had supported some of the proposed revisions, which were proposed at NCUA’s March open meeting. Among the provisions CUNA supported in its comment letter to NCUA filed in May were amendments to allow NCUA's Section 208 Assistance made to troubled credit unions to qualify as regulatory net worth. CUNA also supported a key change to the NCUSIF’s “equity ratio” definition to clarify that the NCUSIF equity ratio must be based solely on the financial statements of the NCUSIF without consolidation with other statements, such as those of conserved credit unions or the Central Liquidity Facility. CUNA strongly opposed a provision that would have added language to the definition of a credit union’s net worth to require “bargain purchase gain” be deducted from a target credit unions net worth when it is merged with another credit union. CUNA was concerned that the proposal would result in a decrease in the combined credit union’s net worth. CUNA recently wrote the agency to urge deletion of the proposal or to seek further comments from the credit union system before proceeding on that provision. The agency will also discuss combining the roles of deputy executive director and chief operating officer into a single position, and the monthly insurance fund report will be presented. For the full agenda, use the resource link.
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