WASHINGTON – The main credit union lobbies were expressing relief yesterday at NCUA’s move to stretch the costs of the corporate credit union bailout over seven years.
"Were the Board not to have taken this action a large percentage of our industry would have lost money this year along with a notable reduction in capital," said NAFCU President Fred Becker, who was lobbying NCUA up until the day before the vote.
In a letter to the NCUA Board earlier this week, Becker asked that the agency review the progress of the plan on a periodic basis to see if any changes should be made. "In such cases," he said, "we urge the agency to offer the credit union industry the opportunity to review and comment on proposed changes or a decision not to change the plans."
"Today’s action by the NCUA Board is precisely what was needed to inaugurate the use of the Temporary Corporate Credit Union Stabilization Fund," said CUNA President Dan Mica in a statement. "Rather than taking a significant hit to earnings and capital this year based on estimates of future losses, credit unions will now be able to pay for those losses on a timetable much more closely aligned to when and if they actually occur."
Becker also expressed concern about the potential for credit unions to be assessed an additional premium to replenish reserves for the National CU Share Insurance Fund. He asked the NCUA Board to consider using the new powers to stretch any replenishment of NCUSIF reserves over as long as eight years.
