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NCUA ratifies higher NCUSIF cap oks community CU conversion
ALEXANDRIA, Va. (10/23/09)--The National Credit Union Administration (NCUA) as expected has approved a final rule that will increase the National Credit Union Share Insurance Fund (NCUSIF) coverage for members of credit unions to $250,000 through 2013. Approval of this rule puts the amount of member funds that are insured by the NCUA on par with the amount covered by the Federal Deposit Insurance Corporation. The NCUA also approved final versions of interim measures that increased overage for revocable trust accounts and mortgage servicing accounts. NCUA staff indicated during the meeting that the small number of public comments received and the lack of public opposition to the interim version of the rule indicated that the time had come to make the interim rule final.
Click to view larger image NCUA Chairman Debbie Matz displays the 10 1b. document associated with the community charter conversion being considered by the agency at the Thurday open meeting. In December the agency will vote on a final rule to streamline the conversion process.(CUNA Photo)
NCUA Chairman Debbie Matz complimented the rule as a “pro-consumer” application of regulations, and urged NCUA staff to look for other instances where regulations can be improved for the benefit of credit union members. The board also approved the Kansas State Supervisory Authority’s request for an exemption from Section 712.3(d)(3) of NCUA's Rules and Regulations, which dictates that an federal credit union that intends to lend to or invest in a credit union service organization (CUSO) must confirm that the CUSO will grant the NCUA and other regulatory authorities access to its records and internal controls before that federal credit union invests in or lends to the CUSO. However, Matz expressed some reservations that allowing state supervisors to take advantage of this exemption for the first time could create a precedent.
Click to view larger image The NCUA board listens to staff attorney Frank Kressman's presentation on a final revocable trust account rule, which, in part, eliminates the concept of "qualifying beneficiary." (CUNA Photo)
US #1364 Federal Credit Union’s request to convert to a community charter that would cover “persons who live, work, worship, or attend school in, and businesses and other legal entities located in Lake or Porter Counties in Indiana” was also approved by the Board during the meeting. Matz spoke in support of the conversion, saying that allowing the credit union to switch charters would strengthen the credit union’s financial condition while also helping the community. However, NCUA Board Member Michael Fryzel told News Now that the NCUA would monitor the progress of the credit union's conversion over the next year and would encourage them to go back and follow up on their conversion plan if the credit union has not increased its activity within the economically depressed city of Gary, Indiana, which lies in Lake County, Indiana. Matz also said that members of the credit union community can expect a proposed rule streamlining the community credit union charter process at the NCUA’s December board meeting. Turning to the NCUA’s statistics on the Temporary Corporate Credit Union Stabilization Fund (TCCUSF) and NCUSIF, NCUA Chief Financial Officer Mary Ann Woodson reported that the 21 credit union failures that have taken place as of last month have resulted in nearly $95 million in losses to the NCUA’s insurance fund. Woodson also reported a total increase of 55 CAMEL Code 4/5 problem credit unions from the amount reported one year ago, and debuted a new slide comparing the total shares of CAMEL Code 3 troubled credit unions. Also of interest, the NCUA board did not, as intended, address the issue of NCUSIF cost estimates for natural person credit unions for 2010. It is now anticipated that the board will consider this at its November 19th meeting.


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