Posts tagged ‘stabilization fund’

Industry Talks the Talk and Walks the Walk

The credit union industry’s long, national nightmare dealing with the fallout from the mortgage meltdown is not quite over, but, NCUA, by laying out its roadmap for a post-crisis framework and giving some money to credit unions in the process, has taken an important step in ongoing efforts to move beyond the crisis once and for all.

For those of you who haven’t seen the news yet, the agency announced several important steps yesterday. It announced that it would be shutting down the Temporary Corporate Credit Union Stabilization Fund which has been in existence since 2009. In addition, it wants to raise the Share Insurance Fund equity ratio to 1.39% of insured credit union assets from 1.30%. If all goes according to plan, credit unions will be getting some money back.
While it’s too early to comment on the specifics – which is a fancy way of saying I need to get a lot more comfortable with the proposal’s intricacies before I start blogging about them – I’ve said it before and I will say it again: the credit union industry writ large should be proud of how it has conducted itself over the last several years. It demonstrated that it not only talks-the-talk but walks-the-walk when it comes to the shared benefits and responsibilities that come with being part of a cooperative system.
• It repaid its debts without costing the American taxpayer a cent.
• All institutions contributed and sacrificed to get the job done.
• Credit unions working jointly with NCUA scaled back the size of the corporate system and limited its powers, doing more to address systemic risk than the banking industry, which created this mess in the first place.
• The agency’s aggressive and innovative use of the legal system to recover funds from some of these banks not only saved credit unions money but has provided a model that all regulators will use in the future to save taxpayer money.
That is a record to be proud of. Had the banking industry and its regulators conducted themselves with the same level of competency and accountability, the American public wouldn’t be quite as cynical as it is today.

July 21, 2017 at 9:12 am Leave a comment

To Survive, Credit Unions Need More Flexibility

imagesCA9YEVRIYesterday, the NCUA announced that it was closing down two credit unions, including Olean Tile Employees Federal Credit Union in Olean, NY and G.I.C. Federal Credit Union in Euclid, Ohio.  Both credit unions started in 1936 with the help of a healthy manufacturing employer to act as their sponsor.  With the demise of the sponsor, the credit unions died as well.  We hear these stories with such frequency that I think as an industry we have become numbed to them but, in fact, they reflect the single biggest trend taking place in the industry that we can do something about.

It’s time to get both state and federal legislators to update our enabling statutes and give all credit unions the flexibility they need to cater to an increasingly flexible economy.  The growth of credit unions reflects the growth of the American working class and unfortunately as the jobs that created that working class disappear, our industry has to change as well.  If we were creating an industry today we would not willingly tie our fate to enabling statutes that tie our growth to select employee groups or associations.  We would push for an expansive view of community as technology expands the size of a given area that any financial institution can serve.  Remember, not only are manufacturing jobs going away, but your average employee is now going to have several jobs in his or her career.  It’s getting harder and harder to classify employees as a distinct group of individuals.

CUNA has already worked with state-level lobbyist to update its Model Credit Union Act and it provides a ready piece of legislation to at least begin the discussion.  In fact, some associations have already successfully advocated for greater by-law flexibility so that their members can craft a membership base that reflects the unique conditions where they live and work.  For instance, it may make sense for a SEG-based credit union to become a community-based credit union that continues a commitment to a specific type of employee group that may be outside of the community.  Credit unions would still have to demonstrate that there is a need for their services.  They simply wouldn’t have to provide those services within an antiquated regulatory straight jacket.

NCUA Releases Share Insurance Fund Projections

In a letter to credit unions released late yesterday evening, NCUA projected assessments for the stabilization fund and the premiums for the insurance fund for 2013.  The combined total means that credit unions face an aggregate payment into the system of approximately 8-16 basis points.

December 18, 2012 at 7:55 am Leave a comment


Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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