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Washington
NCUA asks Corp. CUs to speed biz plan development
ALEXANDRIA, Va. (12/16/10)--The National Credit Union Administration (NCUA) in a letter encouraged corporate credit unions to submit their business plans “as early as possible,” and provided a timeline and other information “designed to enable corporate and natural person credit unions to undergo a smooth transition and ensure no disruption in member services” as they transition into an altered corporate credit union system. In a letter to credit unions sent this week, the NCUA provided an outline of the actions that credit unions will need to take due to the new rule, and the dates by which many of these actions will need to be completed. One key date is March 31, the date by which undercapitalized corporates must provide recapitalization plans and business plans to their members. The NCUA in the letter said that district examiners will work with corporates in some cases to obtain an early understanding of their proposed strategic and capital compliance plans to help expedite the review and approval process. The letter to credit unions and a fact sheet also specifically address corporate capital escrow accounts, capital priority and conversion, the priority of legacy assets, corporate chartering and merging, and various credit union service organization (CUSO) activities. One notable addition is a to-be-established process that will require corporates to maintain escrow accounts for accumulated capital. “If a corporate raises enough capital by Sept. 30, 2011 to meet NCUA’s new capital standards, which take effect Oct. 20, 2011, the pledged capital in escrow will be converted to regulatory capital. However, if a corporate’s capital subscription falls short by that Oct. 20 regulatory compliance deadline, all pledged capital in escrow will be returned to members,” the NCUA said. For the NCUA documents, use the resource links.
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