WASHINGTON - A chastened National Credit Union Administration plans to dilute a proposed regulation affecting corporate credit unions.
The forthcoming proposal, expected in November, will ease the tight asset-liability management and investment quality restrictions of the earlier plan, said H. Allen Carver, director of the NCUA's Office of Corporate Credit Unions.
During meetings with corporate officials earlier this month, "we recognized we had to move away from an entirely matched-book investment philosophy," Mr. Carver said. "And with investment requirements, we should revisit some of the credit ratings and the minimum sizes" of banks where corporates can place funds.
A proposal the regulator issued in April, shortly after the collapse of Capital Corporate Federal Credit Union, was roundly bashed by the industry as being too draconian. The agency yanked the proposal halfway through the 120-day comment period, and, according to Mr. Carver, has received 3,300 pages of comment letters, most of them critical.
The regulator held three days of meetings earlier this month to discuss the coming proposal with corporate and credit union officials, as well as state regulators and trade group representatives.
Corporate officials said the talks went well and were optimistic about the coming proposal.
"It was really upbeat and there was a refreshing exchange of ideas," said Richard Johnson, chief executive of Western Corporate Federal Credit Union, San Dimas, Calif. He was one of the earliest and loudest critics of the regulator's earlier proposal.
Jane Sansone, chief executive of Eastern Corporate Federal Credit Union, Woburn, Mass., attended the recent round of meetings and one before the last proposal was issued. The difference between the sessions, she said, was night and day.
"At the last one we tried to explain the proposal wouldn't let a corporate operate, and our comments pretty much fell on deaf ears," she said.