NCUA: 'Speak Up On Controversial Proposal'

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ATLANTA — NCUA Board Member Gigi Hyland is imploring credit unions to comment on several proposed amendments to its new corporate rule, which will be issued next month.

NCUA has been holding a series of regional town hall meetings on its final rule on corporate stabilization and reform, but additional amendments to the rule already are waiting in the wings and at least one of them-which would bar natural person credit unions from belonging to more than one corporate at the same time-is expected to create some controversy.

At NCUA's regional town hall meeting here last Tuesday, Hyland said, "It is imperative that credit unions comment on it since it will be controversial. Please, please, I'd get on my knees to beg you to comment on that proposal."

"It's a double-edged sword," said NCUA General Counsel Robert Fenner. "On the one hand, being a member of multiple corporates is a way for a credit union to diversify, but on the other hand, it was that kind of competition that led to some of the problems we had."

Other issues discussed:

• Georgia CU League President Michael Mercer asked if, in light of the changes to the indemnification provisions for corporate board members, NCUA is at all concerned about finding people who will be willing to serve on the boards of the corporates. But Fenner said he didn't see why anyone wouldn't want to serve on a corporate board.

• Bill Raker, president of US FCU in Minnesota, asked whether the 22 remaining corporates would be allowed to purchase the NCUA Guaranteed Notes (NGNs). When told yes, Raker asked if the NGNs aren't awfully similar to some of the instruments that the corporates have been banned from participating in.

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Corporate credit unions