CUNA and NAFCU Move Closer to Agreement on Additional Capital
After CUNA dropped its insistence that nonmember capital be allowed, NAFCU agreed to CUNA's request that the groups allow assistance provided by the NCUA be counted as alternative capital. NAFCU said this assistance to troubled credit unions is needed to protect the NCUSIF.
In a letter to CUNA President/CEO Dan Mica following a NAFCU board meeting, NAFCU President/CEO Fred Becker noted that his organization had "supported the inclusion of Central Liquidity Facility (CLF) funds as capital for the corporate credit unions as an emergency measure (directly relative to systemic risk) and has supported changes to net worth for the purposes of the Troubled Asset Relief Program (TARP) assistance for the sake of parity."
But Becker said the board reaffirmed its position that alternative capital should only be provided by a credit union's members.
"From a policy standpoint, NAFCU cannot support a general provision of government assistance being counted towards retained earnings, credit union-to-credit union capital infusions or alternative capital being provided from nonmembers in exigent circumstances," he added.
Those were all requests that CUNA had made in a letter to NAFCU earlier this month.
At press time, staff members of CUNA and NAFCU were working on drafting a joint letter to the NCUA, which is also working on a white paper on the subject.
NCUA Chairman Debbie Matz said at the San Diego town hall meeting that said she is "personally not opposed to it," but she hasn't spelled out her position.