CUNA to NCUA: CUs need help dealing with NCUSIF costs

WASHINGTON (3/8/10)--In a letter to National Credit Union Administration (NCUA) Chairman Debbie Matz, the Credit Union National Association (CUNA) called on the NCUA to "work within its current statutory authority to help credit unions bear the burden" of "unprecedented National Credit Union Share Insurance Fund (NCUSIF) costs."

While CUNA commended the NCUA for helping credit unions "spread out the costs associated with the funding of the Corporate Stabilization Fund," CUNA suggested that the NCUA temporarily reduce the normal operating level of the NCUSIF from the current 1.3% to no lower than 1.2%. This move could reduce the amount of funds that credit unions must pay into the insurance fund, according to CUNA.

CUNA also proposed allowing insured credit unions to spread out their NCUSIF costs over several years, "even if the normal operating level is at or above 1.2%, consistent with a restoration plan to ensure the NCUSIF is properly funded."

CUNA also commended Matz for her open communication with U.S. Treasury Secretary Tim Geithner on the issue of member business lending, and CUNA President/CEO Dan Mica said that this letter was referenced both in his conversation with Geithner and CUNA-backed House testimony that was delivered in late February.

CUNA is developing a white paper on alternative capital for credit unions and will share that paper with the NCUA, the National Association of Credit Union Supervisors, and the credit union system once it is completed. CUNA will also comment on the NCUA's recently proposed corporate credit union rule changes in a letter to be released next week.

CUNA will also provide the NCUA with input on its current process for handling credit union mergers through its newly founded Mergers Task Force. CUNA's recommendations will be provided to the NCUA by May 1.

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