Bill That Includes Corporate Stabilization Provisions Passes
WASHINGTON-As one of its final acts, the 111th Congress passed a bill with three technical amendments requested by NCUA, which the agency says will improve its administration of the insurance fund and the Tempo;rary Corporate CU Stabilization Fund.
"The amendments in S. 4036 significantly enhance the ability of NCUA to manage the NCUSIF and the Stabilization Fund in the most efficient way possible," NCUA Chairman Debbis Matz said in a statement. "Of particular note is the clarification of the application of an accounting standard that enables NCUA to provide capital assistance to a troubled credit union, thus encouraging merger with a healthy credit union. This change minimizes losses to the NCUSIF and benefits consumers by preserving continued credit union service through merger instead of liquidation. This legislation provides important tools to NCUA."
Matx specifically requested these three provisions during her testimony before the Senate Banking Committee on Dec. 9. NCUA said the bill will:
• Clarify that the NCUSIF equity ratio is based solely on its own unconsolidated financial statements, eliminating. This will eliminating confusion about whether the NCUSIF is required to consolidate statements with the Stabilization Fund or with credit unions under conservatorship.
• Allow NCUA to repay expenditures from the Stabilization Fund without first borrowing from Treasury, saving the agency from making additional interest payments, which will reduce the cost of Stabilization Fund assessments to credit unions.
• Calls for two studies, a review of the supervision of corporate credit unions by the Government Accountability Office, and as assessment by the Financial Stability Oversight Council of NCUA's implementation of prompt corrective action.