GAC: Corporate CU session packs the house

WASHINGTON (2/24/09)—A special Monday session on the regulator's

Click to view larger image CUNA President/CEO Dan Mica (left) is shown on stage for the early-morning Governmental Affairs Conference update on the NCUA's Corporate CU Stabilization plan. The session packed the Washington Convention Center hall with thousands of credit union representatives, illustrating the heightened concerns regarding the plan. Shown from left: Mica, CUNA General Counsel Eric Richard, CUNA Corporate CU Task Force Chairman Terry West, CUNA Deputy General Counsel Mary Dunn, CUNA Chief Economist Bill Hampel, and CUNA VP of Legislative Affairs Ryan Donovan. (CUNA photo)
corporate credit union stabilization plan drew a packed crowd at an early bird presentation at the Credit Union National Association's (CUNA's) Governmental Affairs Conference (GAC) Monday.

CUNA and its Corporate Credit Union Task Force continue to investigate possible funding alternatives to the federal regulators' corporate stabilization plan. The task force by late last week completed its third brain-storming session to detail reasonable ways to make the plan less of a burden on credit unions

CUNA President/CEO Mica said Monday that CUNA is well aware of the strong feelings credit unions have about the corporate stabilization plan announced in January by the National Credit Union Administration (NCUA). CUNA also acknowledges, he said, the strong and opposing views credit unions have regarding accepting the U.S. Treasury Department's Troubled Asset Relief Funds (TARP).

CUNA recently executed a survey in which credit unions weighed in on whether or not to seek access to funds from TARP. The poll attracted almost 1,400 responses.

The findings:

  • Sixty-six percent of respondents strongly opposed an infusion of TARP funds into natural person credit unions to bolster their capital.

  • Sixty-two percent opposed using TARP to purchase credit unions' troubled assets.

Survey participants were more favorable toward setting aside TARP funds to backstop the NCUA's guarantee of deposits by credit unions in corporate credit unions. Forty-two percent favored this, while 29% came out against it.

Credit unions were more divided about TARP funds injected to help stabilize corporates or to buy their troubled assets. When asked if CUNA should advocate for these approaches, about one-third indicated a high level of agreement, about one-third had neutral views, and the remaining third reported a high level of disagreement.

Mica and Task Force Chairman Terry West urged the GAC gathering to back efforts to open TARP funds to credit unions in case they need them in the uncertain future. West is CEO of Vystar CU in Jacksonville, Fla.

The legislation that set up TARP last year included credit unions as eligible institutions, but as implemented by the Treasury Department to date, credit unions have not been included.

"This is a train leaving the station," Mica has warned.

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Resource Links
CUNA Resources on Corporate CU Stabilization Plan
NCUA's Corporate Stabilization Plan


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