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CUNA letter to NCUA Board on cost, lack of transparency of conservatorships

March 25, 2009

To members of the NCUA Board:

Over the last few days, I have had the opportunity to receive additional input from individual credit unions, credit union organizations, and leaders of the credit union industry, as well as my own Executive Committee, and I want to reiterate my earlier concerns -- but even stronger, based on their reactions.

I never thought that I would see the day when credit unions were virtually, if not literally, unanimous in their position on a given subject, but that is the case as a result of NCUA's recent conservatorship of two corporates. Every single credit union in the nation that has had an opportunity to weigh in has expressed concern, outrage, anger, and frustration with the current situation.

As a result of the various calls and meetings we have had in the last few days, I have been asked to put in writing the concerns that we have been raising over the past several weeks. Simply put, credit unions have lost confidence and trust in their regulator and feel that our request for additional data, information, communication, and cooperation is being ignored.

In order to assuage the concerns of credit unions, CUNA would like to find a way to have access immediately to all data that you utilized in making the decisions on the two conservatorships. We are specifically requesting the agency provide information on the assumptions, analysis, and findings in the PIMCO report, as we had requested some time ago. If this information cannot be provided, we request NCUA provide CUSIP numbers of all securities held by the corporates so that we may produce our own analysis to be used by the credit union system to evaluate the loss.

Our Board has directed us to work in every possible cooperative way to resolve these issues in an agreeable and acceptable manner for credit unions, CUNA, and NCUA. However, our Board has also directed me to take all necessary actions including Congressional hearings, direct contact with the Administration, and up to including all possible legal remedies, if we are not able to obtain the information credit unions are seeking.

I truly believe that we can address this issue quickly and successfully in a discussion with you and our staffs operating in good faith. I do not think it would be in anyone's best interest to do otherwise.

I look forward to continue to work with you and your staff to immediately resolve our concerns and differences. Unfortunately, because of time constraints imposed on all of us, we will need to move forward before the close of business on Friday.

Sincerely,
Daniel A. Mica
President & CEO
Credit Union Natl. Assn.
Washington, DC

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