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CUNA comment urges legacy asset corp CU rule action
WASHINGTON (8/11/10)—The Credit Union National Association (CUNA) this week submitted comprehensive remarks addressing each subject of the National Credit Union Administration (NCUA’s) 2010 Regulatory Review List. The agency examines one-third of its regulations as part of a yearly review process. The NCUA's Office of General Counsel maintains the schedule that identifies the agency regulations up for review each year. Among this year’s topics for examination were:
* Share insurance; * Administrative actions; * Member business loans; * Fidelity bond and insurance coverage; * Leasing; * Incidental powers; * Regulatory Flexibility Program (RegFlex); * Supervisory committee audits and verifications; * Privacy; * Fair Credit Reporting (FACT Act); and appropriately enough, * The process for identifying rules for review and soliciting comments.
Within its comments on share insurance issue, CUNA seized the opportunity to urge the agency to act by its Sept. 16 open board meeting on two key issues for credit unions; legacy assets and a new regulatory framework for corporate credit unions. “While no credit union official wants the agency to rush the development of the solution, we encourage the agency, to the extent feasible, to make public its decision regarding these assets at (the September meeting), the target date most recently indicated by the board for consideration of the final corporate credit union rule as well as the legacy assets,” wrote CUNA Deputy General Counsel Mary Dunn in the letter. CUNA also urged that if complications preclude such an announcement by the September date, the board should at least provide more information to the credit union system on the approaches being considered and any impediments to their implementation. The NCUA estimated that there were $64 billion in total legacy assets as of early 2009. CUNA has expressed two major concerns with these assets: First, if the actual losses turn out to be sufficiently less than expensed thus far, there should be an opportunity for the credit unions that took the losses to share in the gains; and, second, if the actual losses are greater than expensed thus far, that future capital contributors should not be liable for those losses. Regarding the corporate credit union rules, the NCUA has been reviewing over 800 comment letters submitted on it's proposed rule to strengthen corporate credit union regulation. For CUNA’s complete remarks on the NCUA 2010 rule review, use the resource link below.

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