WesCorp President/CEO Philip Perkins wrote in a letter to members obtained by Credit Union Times that the NCUA's proposed corporate regulations as currently written contain a "number of elements that would have a detrimental impact on credit unions."
Writing the letter to assist members in preparing their own comments for the NCUA, Perkins specifically objected to the regulator's proposed certificate premium redemption restriction, new net economic value tests, and asset weighted average life limits applied to member loans.
"If WesCorp had to adjust the paid yield to compensate the holder/buyer for the inability of its investment to go over par price, we would not issue certificates, because we would not be able to offer investments that would not lose money," he said.
He also said proposed NEV tests are so restrictive, they "prevent corporates from doing business altogether." An all-Treasury portfolio would pass the new NEV test, he said, but would not produce retained earnings, and would actually lose money.
Perkins previously ran Delaware Investments' mortgage-backed securities unit and was a managing director of global markets at Deutsche Bank in London.
NCUA Spokesman John McKechnie responded to the criticism, saying, "The comment period on the proposed corporate rule is open until March, and NCUA welcomes any and all responsible input."