WASHINGTON (3/17/09)—A majority of credit unions responding to a nationwide survey by the Credit Union National Association (CUNA) said they back CUNA’s idea to employ a U.S. Treasury Department back up for the National Credit Union Share Insurance Fund (NCUSIF). CUNA announced Monday that 55% of respondents supported approach of employing a Treasury back up for the NCUSIF as it is tapped to pay for the National Credit Union Administration’s (NCUA) Corporate Stabilization Program (CSP). The responders agreed with the statement: “CUNA should advocate for a set-aside of TARP (Troubled Asset Relief Program) funds to backstop the NCUA’s guarantee of deposits by natural person credit unions in corporate credit unions, only to be accessed if at least $500 million of loss from corporates is first absorbed by the NCUSIF.” Thirty-six percent disagreed with the statement, and 9% were neutral. In another development, the CUNA Board of Directors, upon review of the survey results, voted at a recent to keep all options open in finding alternatives for mitigating costs of credit unions of the NCUA CSP. “We acknowledge strong opinions are held on these issues," said CUNA Chairman Kris Mecham, CEO of Deseret First Credit Union, Salt Lake City, Utah. "This was no easy decision for the CUNA board, but it is in the long-term interests of the credit union movement." In announcing survey results, CUNA noted that it is possible that no Treasury funds would ever be tapped, in that other alternatives identified by CUNA would further mitigate costs for credit unions. Among those alternatives:
* Use the CLF as a source of funding, for loans or capital support; * Improve the accounting treatment of assets that are other-than-temporarily-impaired (OTTI); * Pursue accounting issues that could allow the NCUSIF to recognize its insurance costs over time; * Obtain long-term deposits from CUs into corporates; and * Expand NCUA's Credit Union System Investment Program (CU SIP) to make it more attractive to credit unions.