Corporate May Be Reined In
An outside panel may urge tighter regulation of foreign investments by corporate credit unions, according to a National Credit Union Administration official.
In February, the NCUA slapped a moratorium on investments in foreign banks by U.S. Central Credit Union and corporate credit unions.
That temporary ban may become permanent.
"The preliminary data suggest that the chairman's moratorium on foreign investments was right on the numgers," Karl Hoyle, NCUA executive director, said in an interview last week.
Norman E. D'Amours, chairman of the NCUA, asked corporate credit unions in February to suspend such investments, but it was understood that the board would force compliance if it was not done voluntarily.
The moratorium was spurred by U.S. Central's $255 million deposit in a troubled Spanish bank. It is supposed to remain in effect until the agency finishes reviewing the corporates, including an investigation by the five-member outside panel appointed in March.
Harold Black, a former NCUA board membe3r and chairman of the finance department at the University of Tennessee, Knoxville, heads the panel.
A Team of Academics
Other members of the panel are: Jim Kudlinksi, president of U.S. Central from 1981 to 1985; William Ford, a former president of the Federal Reserve Bank of Atlanta and chairman of the finance department of Middle Tennessee State University, Murfreesboro; Albert DePrince, professor of economics and finance at Middle Tennessee State; and Robert Schweitzer, professor of finance at the University of Delaware.
Mr. Kudlinski's presence on the board rankled some corporate executives. Mr. Kudlinski is said to be critical of U.S. Central's investment policies since he left.
Panel members visited U.S. Central and about a dozen corporates in the course of its investigation, said Bob Loftus, NCUA director of public and congressional affairs. It also met with agency examiners and reviewed regulations.
Diversification Strategy Cited
Some corporate officials have argued investing overseas is necessary to diversify their holdings.
A few days after the moratorium went into effect, U.S. Central president James R. Bell sent a letter to all corporates, state leagues, and state regulators saying he would fight to retain the right to invest abroad.
Before the moratorium, U.S. Central and six corporates placed deposits in overseas banks.
