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NCUA reaffirms CDCI support at Serving the Underserved
NEW YORK (6/21/10)--The community development credit union (CDCU) movement’s two top concerns were given strong support from National Credit Union Association (NCUA) Chairman Debbie Matz in her remarks at the 36th Annual Conference on Serving the Underserved in Pittsburgh earlier this month, said the National Federation of Community Development Credit Unions.
Debbie Matz, board chair of the National Credit Union Administration, gave a keynote address at the National Federation of Community Development Credit Unions’ 36th Annual Conference on Serving the Underserved earlier this month in New York.
The Community Development Capital Initiative (CDCI), the Treasury Department's program to invest in financially sound CDCUs that are certified by the Community Development Financial Institutions (CDFI) Fund, has received 111 applications, Matz said. Announced in February by Treasury Secretary Timothy Geithner, the capital initiative will make secondary capital investments of up to 3.5% of assets in eligible low-income credit unions. Applicants are being reviewed for financial soundness by NCUA. Matz assured conference attendees that “no credit union’s application for CDCI will be denied by NCUA staff without [my] concurrence.” Matz restated her commitment to personally review all CDCI applications before final decisions are made. Federation Governmental Affairs Committee Chairman Deyanira Del Río, board president of the Lower East Side Peoples FCU, the largest CDCU in New York City, said, “We feel confident that Ms. Matz’s commitment to this program will allow as many credit unions as possible to make their case and fulfill the president's intent to strengthen community-based financial institutions serving the nation's hardest-hit communities.” Federation President/CEO Cliff Rosenthal praised NCUA for its flexibility and responsiveness. NCUA worked “closely with the federation under tight deadlines to address critical issues in the CDCI program,” he said. “Her assistance has been crucial. By Sept. 30, we are hoping that as many as 100 credit unions will receive a total of more than $100 million in secondary capital.”
Gigi Hyland, National Credit Union Administration board member, addressed attendees of the sixth Latino Credit Union Conference. (Photos provided by the National Federation of Community Development Credit Unions)
Matz and NCUA board member Gigi Hyland, who opened the Sixth Latino Credit Union Conference two days earlier, touched on NCUA supervisory letter: Supervising Low-Income Credit Unions and Community Development Credit Unions (10-CU-01), which drew upon dialogue among NCUA, CDCUs and federation leadership. The letter “emphasizes that CDCUs and low-income credit unions have unique characteristics and challenges that are very different from those of most larger credit unions,” Matz explained. It “reminds examiners that they should take that fact into account when evaluating loan portfolios, funding sources and operating costs.” Examiners’ primary responsibility is promoting viable and sustainable credit union service to their members. “The letter does not mean that we are easing regulatory scrutiny or providing any special exclusion to the rules,” Matz said. “Every credit union must live up to all the fundamental criteria that ensure the safety and soundness of operations.” “We welcome the priority NCUA’s leadership has given to this, and the training and instruction they have given to examiners,” Rosenthal said. “However, we continue to see a gap between board-level policy and the interactions between examiners and CDCUs.” The federation plans to survey its membership to determine the impact of the letter, and will share its findings with NCUA’s board, he added. More than 300 representatives of credit unions, government, and asset-building professionals attended the federation's event, which began on June 9 with the Sixth Latino Credit Union Conference, co-sponsored by the federation and the Network of Latino Credit Unions and Professionals. A large delegation from Mexico attended, as did a representative of a Senegal credit union. Senior officials of the Small Business Administration and the U.S. Department of Agriculture (USDA) were among the featured speakers. An outcome from an address by USDA Deputy Administrator for Cooperative Programs LeAnn Oliver was the federation’s formation of a rural credit union task force, to be chaired by Marcus Bordelon, CEO of Appalachian FCU, Berea, Ky. He also was honored with the federation's 2010 Annie Vamper “Helping Hands” Award--the highest honor given by the federation.
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