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Inside Washington (06/22/2012)

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  • WASHINGTON (6/25/12)--Both Democratic and Republic lawmakers on Thursday questioned whether new regulations on money market funds are needed to protect to consumers in the event of a future financial crisis. The reforms are advocated by Securities and Exchange Commission Chairman Mary Schapiro, who appeared before the Senate Banking Committee. Senators argued that the money market fund industry contains little risk and has demonstrated resilience over time (American Banker June 22). Schapiro noted that during the 2008 financial crisis one money market fund's value fell below $1 per share, and the federal government took measures to support the industry. Schapiro presented two options for reform. Under one alternative, the share prices of funds would float based on the value of their underlying assets. Under the other option, the funds would maintain a level value, but they would require capital buffers, and restrictions or fees could be placed on exemptions …

U.S. Central could be wound down by October NCUA

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ALEXANDRIA, Va. (6/25/12)--The National Credit Union Administration (NCUA) late last week said it expects to complete its winding down of U.S. Central Bridge Corporate FCU's Automated Clearing House (ACH) services by Sept. 30, 2012.

In a letter to credit unions (12-CU-06) released on Friday, the NCUA said the corporate credit union transition process "has progressed more smoothly than originally anticipated." The agency expects all of U.S. Central's ACH services to be unwound, and transitioned to other providers, three months ahead of the scheduled Dec. 31, 2012 deadline.

The NCUA said all other correspondent services offered by US Central Bridge have already been wound down, so the failed corporate could be completely wound down by the end of October. This move would help reduce corporate resolution costs for credit unions, the agency said.

According to the agency, the following corporates are transitioning to other ACH providers, or have already moved on to other providers: Alloya Corporate FCU; Catalyst Corporate FCU; Central Corporate CU; Corporate America CU; Corporate One Federal CU; First Carolina Corporate CU; First Corporate CU; Kansas Corporate CU; Kentucky Corporate FCU; Louisiana Corporate CU; Missouri Corporate CU; Southeast Corporate FCU; SunCorp FCU; Treasure State Corporate CU (merged into Kansas Corporate CU); TriCorp FCU; Volunteer Corporate CU; and Western Bridge Corporate FCU.

The NCUA has said that ensuring uninterrupted service for natural person credit unions is a top priority during the corporate credit union transition process.

U.S. Central Bridge Corporate was chartered by the NCUA in late 2010 to provide the payment and settlement services of the failed U.S. Central Corporate FCU while the agency worked on a long-term corporate credit union resolution plan, and member credit unions found new service providers.

For the full NCUA letter, use the resource link.

NCUAs TCCUSF receives clean 2011 audit

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ALEXANDRIA, Va. (6/25/12)--The National Credit Union Administration's (NCUA) Temporary Corporate Credit Union Stabilization Fund (TCCUSF) has again received a clean audit, the agency announced.

The audit, which was performed by KPMG, LLP, covered the TCCUSF's 2011 financial statements. NCUA Chairman Debbie Matz said the clean audit was "very welcome news." The NCUA in a release noted it has improved its own internal controls, and has continued to strengthen the systems needed to handle the TCCUSF's many complex transactions, including those related to the NCUA Guaranteed Notes.

These improvements allowed the auditors to complete their examination of the TCCUSF statements six months earlier than they were completed in 2011, and Matz said the 2012 TCCUSF audits should be made in a similarly timely fashion next year.

Matz in a Friday statement said the agency is currently updating loss projections for the corporate credit union system resolution. The projections will be issued by the end of this month, she added.

Credit Union National Association (CUNA) Chief Economist Bill Hampel said he is reviewing the latest NCUA TCCUSF financials to determine what they imply for the remaining assessments to be paid by credit unions.

The agency last year assessed a 25 basis point (bp) TCCUSF premium for 2011, and the 2012 TCCUSF assessment could be discussed at the agency's upcoming July open board meeting.

NCUA Director of Examinations and Insurance Larry Fazio recently said the 2012 assessment is expected to be "within the range of 8 to 11 basis points as provided back in November 2011 for credit union budgeting purposes." CUNA earlier this year predicted the 2012 corporate stabilization assessment would be around nine bp of insured shares.

For the NCUA release, use the resource link.

Future of CUs corporates covered in NCUA video

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ALEXANDRIA, Va. (6/25/12)—The latest corporate credit union system news, as told by National Credit Union Administration (NCUA) Office of Corporate Credit Unions Deputy Director David Shetler, is a key component of the NCUA's latest YouTube economic briefing.

In the video, Shetler covers the latest corporate credit union developments, and explains how these developments could impact corporates going forward.



NCUA Chief Economist John Worth also outlines what recent changes in housing, labor and consumer goods markets could mean for natural person credit unions.

This video is the latest in a series of YouTube videos to inform the public and credit unions about general economic and credit union specific developments.

The videos can also be viewed on the NCUA's YouTube page by using the resource link below.

NEW NCUAs TCCUSF receives clean 2011 audit

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ALEXANDRIA, Va. (UPDATED: 12:00 P.M. ET, 6/22/12)--The National Credit Union Administration's (NCUA) Temporary Corporate Credit Union Stabilization Fund (TCCUSF) has again received a clean audit, the agency reported today.

The audit, which was performed by KPMG, LLP, covered the TCCUSF's 2011 financial statements. NCUA Chairman Debbie Matz said the clean audit was "very welcome news."

The NCUA in a release noted it has improved its own internal controls, and has continued to strengthen the systems needed to handle the TCCUSF's many complex transactions, including those related to the NCUA Guaranteed Notes.

These improvements allowed the auditors to complete their examination of the TCCUSF statements six months earlier than they were completed in 2011, and Matz said the 2012 TCCUSF audits should be released in a similarly timely fashion next year.

Matz said agency staff is currently updating loss projections for the corporate credit union system resolution. The projections will be issued by the end of this month, she added.

For the NCUA release, use the resource link.