Archive June 2009

During the past ten days, President Obama has signed two Congressional bills that affect the credit union system.

The first was H.R. 2351, which provided borrowing authority for a corporate stabilization fund along with extended repayment terms: “not later than the date of the seventh anniversary of the first advance to the Stabilization Fund…” This legislation provides that NCUA may borrow an initial $6 billion, plus additional amounts not to exceed $30 billion. The borrowing draw authority ends December 31, 2010. Read More

Reform on interchange fees may come earlier than expected for card issuers. On Thursday June 4th, Rep. John Conyers Jr. (D-Mich.), chairman of the House Judiciary Committee, and Rep. Bill Shuster (R-Pa.) introduced a bill that would allow vendors to negotiate interchange rates with credit card companies. Read More

Periodically through the last nine months of the financial-economic crisis credit union spokespersons have called for government assistance for credit unions. NCUA Chair Mike Fryzel wrote former Treasury Secretary Paulson and current Secretary Geithner urging credit union access to TARP Funds. Both national trade groups as well as some state league Presidents have also spoken of the need for such assistance. A few credit unions, confronting severe housing downturns in their markets, have lobbied individually for external assistance.
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As NCUA’s oversight of the corporate network continues from the January 28, 2009 original pronouncement of a systemic problem, the unfolding events are similar to a tragedy entering its third act.
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Yesterday, President Obama announced his plan to overhaul regulation in the financial industry. A New Foundation: Rebuilding Financial Supervision and Regulation is an 88-page proposal, laying out the structures and functions of new and old regulatory bodies. The proposed reforms are aimed at filling in gaps in regulation and increasing consumer protection. The biggest changes made in the proposal are through the restructuring of the regulatory and supervisory bodies.Read More

The following quotes show NCUA’s changing assessments of the collective obligation of credit unions (via NCUSIF) to U.S. Central Corporate Federal Credit Union. These statements lead to a critical question: when will credit unions get their money back?January 28, 2009, Letter to Credit Unions (09-CU-02) RE: Corporate Credit Union System StrategyRead More

Below is an email sent to Melinda Love, Director of Examination and Insurance at the NCUA. She is also the President of the NCUSIF and a presenter on today’s event. In it, we have enclosed the questions submitted to credit unions rising via email and article comments.

Melinda,
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In an open webinar to credit unions yesterday, the NCUA announced revisions to the NCUSIF deposit assessment used to replenish depleted funds in the wake of corporate credit union liquidity problems. Additionally, NCUA announced reduction of the premium assessed to counteract increased insurance coverage.Read More