WASHINGTON -- When the NCUA finalizes its revamped corporate credit union rule and plan for dealing with legacy assets, it will enable the industry to begin turning the corner on a "painstaking and frustrating period," Chairman Debbie Matz said today.
She said in a speech to NAFCU's Congressional Caucus that the corporate rule emphasizes "realism, rigor and responsibility." She added that it will strengthen capital requirements, limit the average life of assets to prevent liquidity risks, ban the purchase of private-label backed securities and raise standards for board member requirements. She said the rule won't include term limits, a change from the original proposal.
Matz said there is "no easy way to un-bundle about $50 billion worth of long-term assets." A main goal of the agency's plan is to "devise a way to safely deal with legacy assets at the lowest possible cost and consistent with sound public policy."
The NCUA Board is scheduled to hold a special meeting on Friday afternoon to deal with the corporate rule and legacy assets.
Once those issues are resolved the credit union system will be able to "break free from the burdens of the past and move into a brighter future," she said. She added that the industry's "intangible assets," such as its reputation and brand, will help it grow in the years ahead.