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Washington Archive

Washington

Mica takes alternate funding case to NCUA board

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WASHINGTON (2/2/09)—Credit Union National Association (CUNA) President/CEO Dan Mica contacted the three members National Credit Union Administration (NCUA) board Friday to urge them to reconsider the agency’s plan to aide corporate credit unions. In a letter advocating the credit union case directly with NCUA board, Mica urged “in the strongest terms” that they “reconsider the mechanism NCUA has announced for funding the assistance.” Last week when announcing a plan to bolster the liquidity of U.S. Central FCU and other corporate credit union system, the agency said it would declare a premium assessment to restore the National Credit Union Share Insurance Fund (NCUSIF) equity ratio to 1.3%. The premium will be collected later in 2009. CUNA is not challenging the agency's decision to assist the corporates at this time. However, the NCUA's plan to pay for the assistance in a way that would result in 80-90% of credit unions having negative ROAs is not acceptable, Mica wrote. (See related stories: CUNA concerned about costs of NCUA corporate plan, Alternatives to premium assessment urged by CUNA.) CUNA will continue pressing NCUA next week to address a range of alternatives that will minimize the costs imposed on federally insured credit unions. Mica emphasized that this issue is the highest priority for CUNA's members. Mica noted that the NCUA’s plan to pay for the corporate assistance could not have come at a worse time for the credit union system and underscored that it will impact credit unions’ ability to serve their members and their communities.