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CUNA site compiles NCUA stabilization program info

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WASHINGTON (2/6/09)--The Credit Union National Association (CUNA) has compiled information that may be useful to credit unions regarding the National Credit Union Administration’s (NCUA) Corporate Stabilization Program. A page on the CUNA website provides credit unions with links to the NCUA’s proposed rulemaking for the program, frequently asked questions and additional publications on the matter. CUNA also has provided analyses of the program’s costs on the credit union movement. Credit unions can see how the program will impact the movement as a whole, use a calculation template to see how the costs will affect individual credit unions, or download and examine an Excel file that has the cost estimates for each of the nation's 8,100 insured credit unions. The cost estimates are provided to give credit unions a general feel for the impact of the NCUA's initial plan. The estimate uses September data--the latest CUNA has--so it ignores any growth or changes in financials that occurred, or that will occur subsequently, according to Mike Schenk, CUNA senior economist. “It also assumes the NCUA's initial plan is the one that credit unions will end up with. That is uncertain because NCUA's $3.7 billion guarantee cost was estimated and CUNA, the state leagues, and credit unions are doing everything possible to change the financial equation and make this much more palatable,” Schenk said. The page also includes links to recent News Now stories on the program. News Now will continue to tag stories about the stabilization program with the keyword, “NCUA Corporate Stabilization Program,” which will be placed into an archive accessible to credit unions. For more information and to access the page, use the resource link below.

Corporate CU reform merits CU comment CUNA

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WASHINGTON (2/6/09)—Credits unions are encouraged to share all their concerns and questions regarding a possible restructuring of the corporate credit union system, the Credit Union National Association (CUNA) reminded Thursday. In a CUNA Comment Call posted Thursday, CUNA noted that the National Credit Union Administration (NCUA) asks many questions on very narrow issues in its advance notice of proposed rulemaking (ANPR) regarding the structure and operations of corporate credit unions. However, CUNA advised, credit unions should not feel required to address each question individually or to limit their comments to just the issues that NCUA has presented. “Any concerns or suggestions regarding the corporate credit union system in general are welcomed,” CUNA Deputy General Counsel Mary Dunn wrote. The ANPR was prompted, Dunn explained, by concerns over the recent decrease in the value of corporates’ investment portfolios and the virtual market freeze-up which has prevented the trading of certain investment securities. The NCUA, she noted, believes these challenges have undermined the stability of the corporate credit union system. The NCUA ANPR asks series of questions on a broad range of topics, such as:
* The role of corporates in the credit union system; * Appropriate capital requirements for corporates; * Corporate investment authority and limits; * Asset liability management; and * Corporate governance.
CUNA’s Comment Call asked credit unions to send comments on the ANPR as soon as possible. They are due to the NCUA April 6. Dunn said CUNA’s comment letter to NCUA is being developed in conjunction with its Corporate Credit Union Task Force. The task force was formed late last year to address potential concerns with the corporates and is comprised of individuals from various natural person credit unions. A meeting has been scheduled here next week. Use the resource link below to read all the NCUA’s ANPR questions and access the CUNA Comment Call.

NCUA risk summit hitting capacity

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ALEXANDRIA, Va. (2/6/09)—National Credit Union Administration (NCUA) Vice Chairman Rodney Hood said those seeking reservations for the agency’s 2009 Risk Mitigation Summit on February 19 will have to get on a wait list. Hood said all spaces are committed for the meeting scheduled at the Federal Reserve Bank of Atlanta. The upcoming summit is of particular interest, Hood said, because it will provide a public forum where the NCUA's Corporate CU Stabilization Program can be addressed with a question and answer session. Scheduled speakers include:
* Chris Brown, CFO and Director, Retail Payments Risk Forum, Federal Reserve Bank of Atlanta; * Oscar Rodriguez Ulloa, Superintendent, General of Financial Institutions for Costa Rica; * Robert Manning, Research Professor and Director of the Center for Consumer Financial Services, Rochester Institute of Technology; * Leo M. Tilman, President L.M. Tilman & Co, Adjunct Faculty, Columbia University; * Richard Dorfman, President, Federal Home Loan Bank of Atlanta; * Jack Goodwin, Senior Vice President, Commercial Insurance Division, CUNA Mutual Group; and * Owen Cole, NCUA Director of Risk Management, Director of NCUA’s Office of Capital Markets.
Use the resource link below to contact NCUA.

Inside Washington (02/05/2009)

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* WASHINGTON (2/6/09)--The House Financial Services Committee Wednesday approved a package of bills to increase liquidity and stem foreclosures. One bill, H.R. 786, would make permanent the $250,000 deposit and share insurance increase enacted as part of the Emergency Economic Stabilization Act of 2008. Currently the fund must be replenished in the year that it drops below the required level. The amended version extends the period to five years. The Credit Union National Association (CUNA) supported the measure and an amendment to increase the National Credit Union Administration’s borrowing power to $6 million (News Now Feb. 5). The bill also would triple the Federal Deposit Insurance Corp.’s borrowing power to $100 billion (American Banker Feb. 5). Another bill the committee passed would reduce the fees and required writedowns for servicers participating in the Hope for Homeowners Program. Other legislation passed in the package would protect servicers who modify loans by shielding them from investor lawsuits ... * WASHINGTON (2/6/09)--An inspector general in charge of overseeing the Troubled Asset Relief Program (TARP) said in a report this week that the Treasury needs to develop a better strategy on what to do with the portfolio it manages on behalf of taxpayers(CNNMoney.com Feb. 5). He said it will ask recipients of TARP funds how they used the government money by requiring them to provide documents and plans to comply with executive compensation restrictions. The inspector general also said the Treasury is not properly valuing assets obtained through TARP. The Treasury has spent $300 billion to stabilize the financial sector and has incurred much criticism ... * WASHINGTON (2/6/09)--Senate Banking Committee Chairman Christopher Dodd (D-Conn.) expressed doubt that the Federal Reserve Board should fill the role as a systemic risk regulator (American Banker Feb. 5). The central bank has not handled its current power very well, and acting as a systemic regulator could undermine the bank’s independence, Dodd said at a hearing Wednesday. Dodd also noted that he is thinking about molding all of the bank regulators into one, which would be preferable to the “alphabet soup” of regulators today, he said ... * WASHINGTON (2/6/09)--The challenges that small businesses face in providing health care for their employees was the topic of a House Small Business Committee hearing Tuesday. Years of double-digit premium increases have hit the business community hard, especially small firms, and the issue must be addressed, Rep. Sam Graves (R-Mo.) said at the hearing. Health care reform should make the market for health insurance more competitive, he added. Graves said he supports association health plans, where small business owners could jointly purchase insurance plans at lower rates ...