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Washington
NCUA should give new corporates leeway says CUNA
WASHINGTON (11/3/10)--While supporting its proposed new policy on field-of-membership issues for corporate credit unions, the Credit Union National Association (CUNA) raised several concerns and provided recommendations to the National Credit Union Administration (NCUA) to improve the proposal. For example, the capital plan requirements addressed in the proposed corporate credit union chartering guidance should provide greater flexibility to newly chartered corporates, CUNA Deputy General Counsel Mary Dunn said in the letter. The letter was developed under the guidance of CUNA's Corporate Credit Union Next Steps Working Group chaired by Terry West, President and CEO of VyStar Credit Union. In the comment letter to the NCUA, CUNA added that the Federal Credit Union Act currently allows natural person credit unions to have up to 10 years to become adequately capitalized. “While this timeframe may not be appropriate for a new corporate, we do think reasonable latitude should be afforded new corporate credit unions, as long as they are following a plan to build capital that is approved by the Board,” CUNA said. CUNA also urged the NCUA “to clarify how a new corporate would be able to meet the specific requirement to maintain capital of at least four percent of its moving daily average net assets under the new corporate rule, ‘beginning on the date the Board issues the charter.’” The NCUA should also clarify portions of the proposal that would require organizations submitting corporate credit union charter applications to be comprised of “[s]even or more natural person representatives of natural person credit unions,” CUNA added. According to CUNA,” it is unclear whether each natural person subscriber must represent a different natural person credit union.” The NCUA should also allow some latitude on a case-by-case basis, CUNA added. CUNA proposed that the seven representatives could potentially “represent fewer than seven natural person credit unions such as five, as long as the member support requirements are met.” For the full comment letter, use the resource link.


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