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Washington Archive

Washington

Stress Tests, Contingency Plans On Heavy NCUA Agenda

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ALEXANDRIA, Va. (10/18/13)--A plan to require yearly stress tests at credit unions with assets exceeding $10 billion, and a final rule on liquidity contingency plans, are two of the higher profile items on the National Credit Union Administration's October open board meeting agenda.

NCUA Debbie Matz last month said the agency's Office of National Examinations and Supervision was drafting a stress test requirement. Stress testing of federally insured credit unions with state charters would be conducted in consultation with the state regulator, she said. The shocks used in the stress tests, she added, would be based on scenarios issued annually by the Federal Reserve, with adjustments for differences between banks and credit unions.

Matz said the stress test results may be made public--but the jury was still out on that.  She noted that public disclosure would enhance transparency to members.  However, she acknowledged that results could also be misinterpreted and lead to inaccurate conclusions about a credit union's current stability.

Credit Union National Association President/CEO Bill Cheney last month said CUNA doesn't take issue with the NCUA taking appropriate steps to protect the federal share insurance fund in the interests of all credit unions that it insures. But CUNA is pondering, he added, whether "whether this sort of approach is necessary for credit unions, with their relatively low-risk profile, even for very large credit unions." Any stress test proposal will receive "very careful scrutiny."

The final version of the NCUA's liquidity rule follows a proposed version that was introduced last fall. Under that proposed rule, credit unions with less than $10 million in assets would need to maintain a basic written emergency liquidity policy, but would not be required to take further action. All federally insured credit unions with assets of $10 million or more would be required to develop contingency funding plans describing how their credit union would address liquidity shortfalls in emergency situations.

FICUs with assets of $100 million or more would be required to have access to a backup federal liquidity source for emergency situations.

The Thursday open meeting is scheduled to begin at 10 a.m. (ET). Other items on the NCUA open meeting agenda include:
  • A board briefing on an interagency rule on loans in areas with special flood hazards;
  • The quarterly National Credit Union Share Insurance Fund report; and
  • A final rule on electronic filing of financial reports.
Two requests made under the Federal Credit Union Act are on the closed board meeting agenda.

For the full agenda, use the resource link.

CUNA: CUs Must Redouble Efforts As Normalcy Returns In D.C

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WASHINGTON (10/18/13)--With a budget catastrophe averted, at least for now, credit unions must redouble their tax advocacy efforts as members of the U.S. Congress dust off and get back to work, Credit Union National Association Executive Vice President of Government Affairs John Magill said Thursday.

The budget agreement reached this week requires congressional leaders to name conferees to a budget conference committee that would issue recommendations by Dec. 13. Tax reform will likely be one of the items discussed as budget changes are debated, Magill noted.

"We absolutely cannot let our guard down," Magill emphasized.

The government shutdown and the debate that surrounded it created a short delay, but Magill said Senate Finance Committee Chair Max Baucus (D-Mont.) and House Ways & Means Committee Chair Dave Camp (R-Mich.) are still committed to tax reform, and are looking at an emptying hourglass as elections approach next year.

"They want to move sooner rather than later," Magill said.

In addition, members of Congress are also well aware of the criticism levelled against them in recent days, and they will be eager to show the American public that they can, in fact, do positive work. Immigration reform and the farm bill--with controversial food stamp provisions and  federally subsidized crop insurance--are two of the other topics at the top of their list.

Magill said he is glad that CUNA began this latest round of tax status advocacy in May of this year. Credit unions "have not stopped" since that time, and they must keep up the good work to remind members of Congress that a tax on credit unions is a tax on 97 million Americans, he added.

CUNA has provided a host of Take Action tools on www.DontTaxMyCreditUnion.org to help credit union supporters back the tax status. Supporters have spoken up by sending tweets, pictures, vine videos, and e-mails to their members of Congress, all with the #DontTaxMyCU hashtag.

CULAC-Backed Booker Wins N.J. Senate Seat

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WASHINGTON (10/18/13)--Credit Union National Association Vice President of Political Affairs Trey Hawkins said CUNA is looking forward to working with credit union-backed New Jersey Senate candidate Cory Booker (D), who won his special election contest Wednesday by an 11-point margin.

"Booker has been a great credit union supporter and we look forward to working with him in the Senate. We are confident that he will be as effective a leader here in Washington as he was in Newark," Hawkins added.

The New Jersey Credit Union League (NJCUL) and CULAC, CUNA's federal political action committee, supported Booker in his campaign efforts, making the legal maximum donation of $5,000.

Booker, the outgoing mayor of Newark, N.J., beat his Republican opponent, Steve Lonegan, by winning 54% of the total vote. New Jersey has not elected a Republican to the U.S. Senate since 1972.

Booker will take the seat vacated when Frank Lautenberg died on June 3 once the vote is certified. That could occur as soon as the first week of November. State Attorney General Jeff Chiesa (R) was appointed by Gov. Chris Christie to fill Lautenberg's seat on an interim basis since June.

NJCUL Director of Government Affairs Chris Abeel said the league has been building relations with Mayor Booker for several years, and noted Booker has expressed his support for credit unions several times.

"We are excited to work with him in his new role as a U.S. senator," Abeel added. Booker has spoken at New Jersey state credit union chapter meetings, and has taken part in a Garden Savings FCU event that benefitted the Newark Y.E.S. (Youth Education, Employment and Success) Center.