WASHINGTON (1/14/10)--The Credit Union National Association’s (CUNA) corporate credit union task force has been reviewing the National Credit Union Administration’s (NCUA) comprehensive proposal in detail and discussing the corporate credit union system during a three day meeting in Washington. The task force, led by VyStar CU President/CEO Terry West, analyzed the NCUA’s recently proposed rules for corporate credit unions which would adjust the current corporate capital requirements by replacing the current 4% minimum total capital ratio with a 4% minimum leverage ratio, a 4% tier one risk-based capital ratio, and an 8% total risk-based capital ratio for adequately capitalized corporate credit unions. Corporate credit unions would be required to demonstrate capital ratios of 5%, 6% and 10%, respectively, to be considered well capitalized. The task force is comprised of federal credit unions, state credit unions, and state credit union leagues. The proposal would also prevent corporate credit unions from investing in collateralized debt obligations and net interest margin securities, and would limit so-called "golden parachutes" for troubled corporates and require corporate credit unions to disclose their executive compensation packages. The proposed rules also add new net economic value tests, impose new investment concentration limits and weighted average life constraints, and prohibit corporates from redeeming member certificates at a premium. The NCUA rules would also seek to ensure that corporate boards are mainly comprised of natural person credit union employees, and would require any of these board members to hold the position of CEO, CFO, or COO at their member entity. The CUNA task force met with a range of experts and stakeholders, including Community America Credit Union CEO Dennis Pierce, Association of Corporate Credit Unions executive director Brad Miller, SW Corporate CEO John Cassidy, First Corp CEO Pete Pritts, and Callahan and Associates CEO Chip Filson. NCUA General Counsel Bob Fenner, Office of Corporate Credit Unions Director Scott Hunt, and other senior NCUA staff also met with the group, and the NCUA will be holding conference calls and other meetings in the coming weeks. The NCUA is continuing to reach out to individual credit unions to discuss their corporate proposal, and the corporate proposal will be a topic of discussion at an upcoming NCUA town hall meeting to be held in Dallas, Texas. The NCUA has given a deadline of March 9, 2010 for all comments on its proposed changes to corporate credit union rules to be submitted. CUNA plans to develop a draft comment letter by mid-February, and will also address the NCUA proposal and key issues regarding corporate credit unions at a breakout session of the Governmental Affairs Conference on Feb. 23 at 2 p.m. For the NCUA proposal, CUNA's summary, and a chart comparing the proposal with the current rule, use the resource link.