ALEXANDRIA, Va. — The NCUSIF's reserve balance was $5.2 billionlast month, including an increase of $1.2 billion in losses for thecorporate credit unions, NCUA Chief Financial Officer Mary AnnWoodson told the board last Tuesday.
The reserve balance includes $13.7 million in reserve balanceexpense for natural person credit unions. At the end of February,the reserve balance was $3.9 billion.
The fund had a $500,000 loss in income last month.
That's less than the $8.2 million loss projected, and the fund hashad a net income of $146.4 million so far this year.
As of March 31, it had $23.4 billion in assets, compared with $12.0billion at the end of March 2008.
Its equity ratio was 1.3% as of March 31.
The NCUA Board also extended its program to guarantee the depositsof credit unions in corporate credit unions to accommodate atwo-year rolling expiration date.
During its executive session following an open meeting, the boardvoted to provide the option of quarterly extensions throughDecember 2012.
“The action of the NCUA Board sends a clear signal to naturalperson credit unions that their investments in corporate creditunions are not only safe, but also meet sound asset liabilitymanagement principals by providing for orderly laddering of theseinvestments. It is important that they continue to provide theliquidity that is
needed to maintain corporate stability,” NCUA Chairman Michael E.Fryzel said in
a statement.
As part of the corporate stabilization plan announced in January,the NCUA agreed to guarantee all deposits in corporate creditunions through the end of 2010.
At the public meeting, the board approved proposed clarificationsof some of its previously passed credit card regulations, includingallowing credit unions to raise the interest rates on the accountsof returning veterans if they give them 45 days notice.
Under federal law, people on active military duty can be charged nomore than 6% interest on credit cards. The rate automaticallyreturns to the original rate once the person is no longer on activeduty but the rule requires 45-day notice to raise the rate abovethat.
The proposals also state that credit card issuers can continue tooffer varied interest and related programs, but the charges cannotbe changed through a “hair trigger” or “universal rate”increase.
There is a 30-day comment period.
The board also voted to give the Office of Small Credit UnionInitiatives additional powers to go along with the authorityprovided last year to be the focal point during the credit unionchartering process. The powers include requiring its approval forrevoking charters and entering into a Letter of Understanding andAgreement with the credit union.
NCUA Vice Chairman Rodney Hood suggested that the office take aninventory of its procedures to determine how the additionalworkload will impact its ability to perform its responsibility.After that, he requested that the office's director, Tawana James,meet with the board to discuss if its existing staffing levels areadequate.
The board also approved upgrading two positions in the Office ofCapital Markets and creating two new positions in the CentralLiquidity Facility.
J. Owen Cole, director of the office of capital markets andplanning, said the changes were necessary in light of the increasedand more complicated nature of the workload in those areas becauseof the problems facing the corporate credit unions. He said hehoped to have the new employees on board before the end of theyear. The changes are estimated to cost $296,500.
The board also voted not to pay an additional $13,582 to thecompany that Norlarco Credit Union in Ft. Collins, Colorado wasleasing space from at the time NCUA liquidated it in February2008.
The company, Centre Tech III, had requested $13,582 to pay forunamortized costs of refinishing the property and the unamortizedbalance of a real estate commission. Hattie Ulan, a special counselto the NCUA General Counsel, said under federal law, the NCUA isonly liable for rent due during the period in which the propertywas occupied.
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