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Corporate CU Task Force backs CUNA alternatives
WASHINGTON (2/13/09)--The Credit Union National Association (CUNA) Corporate)
Click to view larger imageCUNA President/CEO Dan Mica (left)and CUNA Board Chairman Tom Dorety engage in the group's Corporate CU Task Force discussion about the National Credit Union Administration's corporate stabilization plan and what lies ahead for credit unions. Dorety is /CEO of Suncoast Schools FCU, Tampa, Fla., and a member of the task force , which is headed by Terry West of Vystar CU in Jacksonville. (CUNA Photo)
Credit Union Task Force Thursday reaffirmed strong support for using the Central Liquidity Facility (CLF) and TARP funds as a back up to help fund corporate credit union liquidity. Under CUNA’s plan, the CLF or Treasury’s TARP could be used as a back up to the National Credit Union Share Insurance Fund (NCUSIF) to help support the cost of the deposit guarantee for corporate credit unions announced by National Credit Union Administration (NCUA) last month. The task force first identified the use of the CLF and TARP funds to lessen credit unions' costs associated with the corporate assistance in its inaugural meeting Jan. 29. The group noted that use of the CLF to provide liquidity or capital directly to the corporates would require an amendment to the Federal Credit Union Act. It endorsed CUNA'S efforts to work with NCUA and the National Association of Federal Credit Unions to seek the statutory change. While backing the CLF and TARP as key priorities, the task force encouraged CUNA to continue working on other alternatives, particularly in the accounting area. Other CUNA alternatives to help mitigate the costs of the deposit guarantee for the corporates include:
* Continued efforts to seek improvements in the accounting treatment of assets that are other-than-temporarily-impaired (OTTI); * Pursuing accounting issues that could allow the NCUSIF to recognize its insurance costs over time, thus giving credit unions some flexibility on when they must fund the costs and reflect them on their books; * Long-term deposits from CUs into corporates; and * Expanding NCUA's Credit Union System Investment Program (CU SIP) to make it more attractive to credit unions.
The task force also discussed plans to have a dialogue in coming weeks with NAFCU on issues surrounding the corporate stabilization plan.


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