Submitted Questions for NCUA's 6/24 Corporate Stabilization Webinar

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,

Credit Unions Rising, a website for credit union professionals to share concerns and ideas about pressing industry issues, has been encouraging our members to attend today’s Webcast regarding the Corporate Stabilization. In preparation, we have asked our members to submit questions beforehand. We have included them below for your review. Thank you in advance for your time and consideration. We look forward today’s much-needed, timely event.

Please let us know if you have any questions or concerns.

Sincerely,

Leigh Anne Terry
Credit Unions Rising.

List of Questions for Wednesday’s Hearing

1. Since the corporates are at present solvent, and the NCUA is sitting on the stabilization funds, what type of dividend to credit unions is planned?

2. If the NCUSIF deposit is returned to 100% for accounting purposes, what happens if a CU withdraws from the NCUSIF and purchases private insurance on July 1? Would the refund of the deposit be 100%?

3. What about the REAL plan for corporate stabilization based on the ANPR? Will we see consolidations of corporates, capital requirement changes, investment authority changes, and a separate insurance pool? If so, what’s the timeline for some of the actions?

4. Does NCUA plan to hold the conserved CUs investments until maturity?

5. In the past week, we were made aware of more 4 & 5 rated NPCUs. When can we expect the other shoe to drop — an announcement of more cost to healthier NPCUs in addition to the corporate stabilization? Do we have even rough estimates on anticipated NPCU losses?

6. It is not too much of a leap to deduce from the actions being taken that the NCUA might have an additional goal, unpublished, as an outcome. Is there an effort by the NCUA to restructure the make up of the credit union movement to:

• a smaller number of credit unions
• an elimination or severe diminishing of credit unions under a selected size.
• an organization of only credit unions above some ‘magic’ asset size? >$300M as an example.
  

7. Some CUs might not want to reverse the entries we made in 2008 or early 2009 because we want the write off over and done with and don’t want to extend it another 7 years. Are we required to reverse the entries if we don’t want to?

8. Will there be an adjustment to the fund resulting from the increase of insured shares at NPCUs caused by insurance levels going from 100,000 to 250,000? If there is an increase, will it be set up and accounted for as a receivable since the increase is only temporary at this point and will be theoretically returned at some point in time?

9. What is the NCUA’s best estimation or forecast of 2009 and 2010 insurance costs (including corporate stabilization, increased insurance costs of $250k, share growth and CU failures or merger assistance) to natural person credit unions?

10. Due to the forced expense by NCUA all credit unions are taking drastic measures to salvage their ROA – lay-offs, no new hires, cut programs, delay needed major purchases, etc. Why is NCUA not taking drastic measures to cut their operating cost?

11. Why has NCUA been so secretive on their actions throughout this corporate stabilization process? Why was the industry not consulted?

12. Many credit unions no longer trust the NCU. Are you going to take any measures to rebuild trust? What are they?