ALEXANDRIA, Va. – NCUA last week called corporate credit unions representatives to a meeting at its headquarters to discuss the continuing diminishment of capital in the corporate network.
NCUA Chairman Deborah Matz, speaking to the Association of Corporate CUs in Dallas last week, said at the meeting they will discuss ways the corporates can replenish capital if projected losses on their portfolios do not materialize. "Many of you believe that there should be some mechanism within the corporate structure to allow contributed capital accounts to be replenished if losses don’t fully materialize as projected," said Matz in a prepared statement. "I’ve gotten the message loud and clear that this is a concern. So I have asked senior NCUA staff to participate with corporates in a special meeting on this issue."
The meeting comes as corporates are dealing with growing losses on their mortgage-backed securities holdings and on their capital in U.S. Central, which they are being forced to pass on to their natural person credit union members. The combination has depleted capital in almost every corporate below NCUA’s minimum capital requirements, forcing NCUA into a regulatory forbearance, freezing all corporate capital levels to what was reported last Nov. 30, before the realization of losses at U.S. Central.
The Nov. 5 meeting will take place two weeks before the NCUA Board is scheduled to issue for comment new rules governing corporate capital, investments and governance.
