Corporate credit unions are collectively turning up their noses to the same proposed amendments to the NCUA's Part 704 regulation. Namely, corporates object to clauses that give the Office of Corporate Credit Unions subjective power; investment restrictions that will hinder their ability to earn revenue; and, a lack of a plan to address toxic assets that continue to drain capital from the system.
However, the comments also show that as a group, corporates are fragmented in their opinions about the future structure of the system. Members United Corporate FCU, which posted its letter yesterday on its Web site (www.membersunited.org), said limiting risk isn't enough. The $8.7 billion corporate proposed a complete overhaul of corporate structure that requires massive consolidation.
The $1.8 billion First Carolina Corporate FCU countered that credit issues are the heart of the problem, and without private label mortgage backed securities and the losses they've produced, liquidity and the ability to provide other core services to members would not be threatened.
"We would like to see a final regulation that places a priority on credit quality of investment portfolios while allowing more room for managing non-credit related risks," President/CEO David Brehmer wrote in FCCFCU's comments.