ALEXANDRIA, Va. – CUSOs are asking NCUA to reconsider a proposed amendment to its new corporate credit union rule that would require CUSO members of corporates to pay into the corporate bailout.
Required “voluntary” payments into the corporate bailout would serve as a double assessment to CUSO owners already paying into the corporate bailout and could force CUSOs to look outside the credit union industry for funding needs, according to a comment letter on the corporate proposal submitted by the National Association of CUSOs.
The NCUA proposal would allow corporates to assess payments on CUSOs, privately insured credit unions and other non-federally insured credit union members that would be “voluntary” because those entities are not regulated by NCUA.
“We understand NCUA’s interest in shortening the period required for the NCUSIF to repay the US Treasury for the corporate stabilization expenses and we share that interest. Likewise, we recognize that NCUA has long felt that the NCUSIF could potentially be compelled to bail out non-federally insured credit unions if they fail because this could pose a risk to the industry confidence,” wrote NACUSO. “However, there is no expectation that NCUA would bail out a failing CUSO or that the failure would cause an industry confidence risk.”
“When coupled with the fact that there is currently no statutory authority for the direct regulation of CUSOs by NCUA, we strongly feel that this provision goes well beyond the bounds of appropriate and authorized regulation, at least as it relates to CUSOs,” said the group.
The NACUSO comment letter was signed by both its outgoing president Tom Davis, and its incoming president Jack Antonini.
