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NCUA tells CUs to evaluate corp. CU membership
ALEXANDRIA, Va. (4/21/11)--The National Credit Union Administration (NCUA) has encouraged credit unions to “explore their options and understand the pros and cons to continuing with current practices” or transitioning to new corporate credit union service providers. NCUA Office of Corporate Credit Unions Director Scott Hunt added that credit unions that wish to remain or become members of a corporate should review the corporate’s capital plan and capital offering circular, and “attend informational sessions or speak with their assigned representatives to learn more about the future of the corporate.” Hunt co-signed the NCUA letter, which was addressed to Members United Bridge Corporate FCU, Southwest Bridge Corporate FCU, and Western Bridge Corporate FCU. Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said that “because credit unions will be providing the capital corporate credit unions need to meet regulatory requirements, credit unions should weigh their options for payment, settlement and other support services very carefully. “Reviewing the capitalization plan of their current corporate credit union, once NCUA has approved the plan, is a good place to start,” Dunn added. Undercapitalized corporate credit unions earlier this year submitted their recapitalization plans to the NCUA, and those plans are currently under agency review. The NCUA’s new capitalization rules, which will, among other things, require corporates to maintain escrow accounts for accumulated capital, come into effect on Oct. 20. Corporate and bridge corporate credit unions that have submitted plans to the NCUA must share those plans with their member credit unions by May 31, and Hunt said that the agency is “expeditiously reviewing the submitted capitalization plans” in anticipation of this May deadline. Dunn said that with the NCUA’s late October deadline rapidly approaching, credit unions should “develop their plans now for how they will assess their options and decide what choices are best for them.” For the full NCUA release, use the resource link.
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