CUNA comments on Part 704
WASHINGTON - In its comment letter to NCUA on the corporate reg, Part 704, CUNA questioned the need for the new earnings retention requirement. "It seems to be drawn from Prompt Correction Action, which for sound, public policy reasons does not apply to corporate credit unions," CUNA wrote. CUNA advocated for a more risk-based system for corporates, similar to the philosophy NCUA has taken on natural person credit unions. CUNA's comments echoed most of what the ACCU said, including eliminating the provision limiting a corporate's ability to pay dividends if retained earnings drop below 2%; eliminating "definition of trade association" for purposes of eligibility of corporate board members; and accounting for daily average net assets on the settlement date, not the advice date.