Chief among the NCUA's goals is safeguarding corporates' ability to provide core services to members regardless of market conditions. The NCUA's ANPR questions whether payments systems should be isolated from other services.
Isolating payment systems from investments could be done, said Western Corporate Federal Credit Union Executive Vice President of Member Services Tony Kitt; however, credit unions might not like the end result.
"The business models we follow and the value they produce have been proven over time," Kitt said. "Right now, we're in the worst economic conditions I've seen in my lifetime, and we want to make sure everyone is protected. But that comes at a price."
For starters, the money needed to create the cushion would come from member credit unions, which are already strapped for cash.
"It's just not the most efficient use of funds," Kitt said. "If you set aside a day or two worth of settlement to completely eliminate risk it will ultimately lead to a lower yield on a credit union's market daily account, which will negatively affect a credit union's bottom line. It's a difficult position."
The value isn't just isolated to payment systems. The corporate business model has fairly integrated payment and investments product offerings, Kitt said. And a big part of the corporate value proposition is serving as a primary financial institution, balancing the demands of payment systems, liquidity and investments, he added.
A legal and operational firewall as suggested in the NCUA's ANPR could potentially jam up the flow of funds, he added.