Fryzel: NCUA committed to corporate system improvements

ALEXANDRIA, Va. (6/23/09)--In statements released today on the National Credit Union Administration's Web site, NCUA Chairman Michael Fryzel said that new rules governing corporate credit unions should "not only reflect the lessons learned from the current situation, but also enable NCUA, and the industry, to avoid future problems."

Speaking before the Florida CU League's yearly convention late last week, Fryzel added that he is committed to ensuring that future corporate reforms would be "more effective at understanding and mitigating risk, while at the same time recognizing that corporates can play a useful and important role in facilitating credit union service to members."

"This rulemaking process will entail hard work, honest dialogue and difficult decisions," Fryzel said. However, he is "confident" that the rulemaking process would result in a "better corporate network."

The NCUA recently addressed other issues in the corporate credit union system by approving the corporate credit union stabilization plan at its monthly board meeting, which was held last Thursday. During the meeting, the NCUA board agreed to immediately borrow $1 billion of the total $6 billion offered by the U.S. Treasury to shore up the corporate credit union system.

The $1 billion in borrowed funds would be used to "secure the re-assignment" of the National Credit Union Share Insurance Fund's (NCUSIF) capital note at U.S. Central Federal Credit Union. This would result in a $1 billion increase to the NCUSIF's equity, the NCUA said. (See related story: New corp stabilization plan implemented by NCUA June 19.)

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