A Treasury Department official on Monday criticized the National Credit Union Administration's oversight of corporate credit unions.
In a speech to the Association of Corporate Credit Unions, Assistant Treasury Secretary Richard S. Carnell questioned whether the NCUA "currently has the sort of capacity it should have to review industry trends, size up potential systemic risks, and assess corporate credit unions as a group."
Though corporates are in "good health" and hold generally safe investments, Mr. Carnell said, the Treasury Department is worried that they are too heavily invested in the same types of asset-backed securities.
He noted that the NCUA rules limit investments in the obligations of a single issuer but not the amounts put in particular types of assets.
Mr. Carnell recommended that the NCUA pay more attention to systemic risks and take a broader approach to examining corporate credit unions, akin to the risk-based focus of banking regulators.
NCUA spokesman Bob Loftus responded that Mr. Carnell's speech described the agency's supervision as significantly improved from recent years despite these criticisms. "We understand Mr. Carnell had some constructive recommendations, and we look forward to examining those in more detail when the Treasury report is made public," he said.
That report, mandated last year by Congress, is expected to be released in mid-December.
-Jaret Seiberg and Dean Anason
