BOSTON – The audit report on failed corporate U.S. Central is expected shortly and should help dictate its future, according to NCUA Board Member Gigi Hyland. NCUA placed U.S. Central into conservatorship in January of this year.
Separately, Hyland said natural-person credit unions will find examiners remain focused on threats to their financial position, and suggested CUs make it easy to demonstrate how lending risks are being accounted for.
“The examiners will tend to be more risk adverse and not have the same issues crop up on their watch that happened in the past,” she said. “You are in the business of risk as credit unions: point blank, end of story…We cannot ask you to avoid all risk, but we can ask you to manage risk appropriately. The key to the credit union system has been, and will be in the future, service to members. Everything you do must be judged in that light.”
During her remarks, Hyland also called for a gradual increase in the 12.25% cap on member business loans. In response to those comments, CUNA CEO Dan Mica issued a statement saying those concerns are already “addressed in the Kanjorski-Royce bill by raising the business lending cap to only 25%. We would like to see the cap taken off of member business lending by credit unions, because it will help the economy and because credit unions have proven themselves responsible lenders. HR 3380 is an important step in that direction. Board Member Hyland, like the other members of the NCUA Board, is clearly performing her due diligence as a regulator to ensure that credit unions do the job right when they begin making more business loans. However, the agency has a number of tools today at its disposal to ensure that happens.”
