WASHINGTON (7/24/12)--Credit Union National Association (CUNA) President/CEO Bill Cheney in a letter to the National Credit Union Administration (NCUA) urged the agency to set its 2012 Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessment at the lowest end of its projected eight to 11 basis point of insured shares range.
Considering that estimates of total remaining TCCUSF assessments are still in the range of $4 billion to $4.5 billion, the 2012 assessment should charge credit unions "no more than is necessary for liquidity purposes," Cheney added in the letter.
The CUNA letter was sent ahead of today's NCUA open board meeting. The agenda for the meeting includes:
- Adjustments to the agency's 2012 operating budget;
- Discussions of the interest rate cap for federal credit unions;
- A proposed rule addressing the agency's definition of a credit union that is in "troubled condition";
- A briefing on an interagency Truth in Lending Act proposal;
- A report on the status of the agency's insurance funds; and
- A new emergency liquidity regulation.
The CUNA letter also urged the NCUA to take significant steps to reduce its budget for the remainder of 2012. The agency should also contain expenses and staffing levels for 2013, and develop a budget that does not require any additional funding from credit unions, Cheney wrote. "An even better outcome would be for the agency to cut its budget and to decrease the costs to credit unions needed to operate the agency," he added.
Cheney in the letter noted CUNA has "serious concerns about any new rule for credit unions, including in the area of liquidity." Rather than seeking to regulate liquidity, "a better approach would be to focus on the guidance the federal financial agencies have already produced on liquidity issues," Cheney told the NCUA.
CUNA recognizes that a thorough consideration of liquidity sources for credit unions should include NCUA's Central Liquidity Facility. CUNA Chief Economist Bill Hampel on Monday noted that the CLF was created 30 years ago to address situations that existed at that time, and the program could use an update. CUNA's System Liquidity Task Force, chaired by VyStar CU, Jacksonville, Fla., CEO Terry West, believes there is a role for the CLF, but is examining how the fund is operated and funded.
The task force will meet with NCUA officials in the coming weeks and will report any recommendations to the CUNA Governmental Affairs Committee which reports to the CUNA Board.
For the full CUNA letter, use the resource link.