RALEIGH, N.C. State Employees’ CU, one of four $10 billion-plus credit unions that would be stress-tested under a proposal being discussed by NCUA, is all in favor of the tests now undergone by big banks and insists the results should be made public, as they are for the banks.
“I think it’s a good idea and I think it should be done,” Jim Blaine, president of the $26-billion credit union, told Credit Union Journal. Blaine suggested that rather than have NCUA perform the stress tests, the Federal Reserve, which already has set parameters and tested banks, should conduct the tests.
In fact, Blaine said the nation’s second-largest CU has already used the government’s standards to conduct its own internal stress testing, which amounts to how a bank’s or credit union’s balance sheet will perform under the stress of high unemployment, inflation, rapid rises in housing prices and other scenarios. “We tried to simulate it from the Fed’s parameters,” he said.
And Blaine, who has campaigned to make confidential CAMEL codes public, is adamant the results of the tests should be made public. That way members and investors, in the case of banks, know the true health of their institution, he asserted. “It’s not worth anything if it’s not published,” said Blaine.
The SECU chief executive’s remarks came after NCUA Chairman Debbie Matz announced the agency’s proposal to stress test credit unions with more than $10 billion in assets. There currently are four credit unions above the threshold besides SECU Navy FCU, Pentagon FCU and BECU with a fifth, SchoolsFirst FCU, poised to join the club by year-end.
