WASHINGTON - Among the joint CUNA/NAFCU task force recommendations on corporates are:
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- Services of corporates should be limited to a defined set, including payments and settlements, liquidity and short-term investments. Further, longer-term, on-balance sheet investments should not be offered by corporates.
- Contributed capital should be required for membership and service use by credit unions; corporates will have to present a sufficiently compelling business case covering both the value of services provided and strong risk control.
- With limits on risk-taking, competition among corporates will be driven by efficiency, placing a premium on economies of scale and thus creating substantial pressures for consolidation.
- Insurance coverage for natural-person credit union (NPCU) shares and deposits in corporate credit unions must be limited to the maximum coverage for personal deposits and shares in the NPCUs.
- NCUA oversight of corporates must be improved, with adequate qualified staff with special knowledge of the complex operations of corporate credit unions.
- Corporate board members must have sufficient expertise to govern their corporate consistent with the powers of the CCU.
The task force was co-chaired by Terry West, CEO of VyStar Credit Union in Jacksonville, and Michael Lussier, CEO of Webster First FCU in Webster, Mass.
