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Washington
Matz responds to CUNA letter on corporates budget
WASHINGTON (12/16/09)—Responding to a Dec. 3 letter from the Credit Union National Association (CUNA), Chairman Debbie Matz of the National Credit Union Administration (NCUA) reiterated that the agency is "continuing the process of evaluating the future disposition" of corporate credit union assets. Matz, in her letter addressed to CUNA President/CEO Dan Mica, said her agency's efforts to elicit stakeholders' views on future asset distribution have yielded "constructive if not conclusive" examinations of the options. She told Mica, "...let me assure you that we continue broad-based explorations of ways in which 'legacy' assets can be addressed." CUNA has continued to push the NCUA for a reasonable approach regarding possible recoveries on corporate credit union legacy assets if confirmed future losses are below current estimates of those losses. In her letter to Mica, Matz assured she is confident that the agency will find a "workable, practical, legal solution...despite the complex and evolving financial situation before us." The NCUA chairman also responded to concerns CUNA has communicated about the agency's proposed 2010 budget. Mica had written that some budget increase is to be expected to support agency efforts to handle additional safety and soundness concerns wrought by troubled financial times. But he urged the agency to consider it a priority to determine how to reduce spending once the crisis has passed. Matz said of the 2010 budget, it balances "the needs for additional personnel and oversight with a recognition that the resources present are limited and the industry NCUA supervises is under financial duress." The total 2010 budget proposed Nov. 19 by the NCUA is $200,923,512, an increase of 13% over the 2009 budget. CUNA has raised credit unions’ concerns regarding the size of the increase for agency staff compensation next year—a 6.6% net growth in merit pay and locality adjustment. The agency needs to be sensitive, Mica has said, to the fact that credit unions across the nation are scaling back expenses, including employee benefits, and have been forced to reduce salaries, enforce unpaid furloughs, as well as execute reductions in the number of workers.


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