NCUA Chairman Debbie Matz, speaking to Texas credit union leaders as part of the agency's town hall series last week, reaffirmed an agency pledge to honor expiring service contracts CUs have with conserved corporates, possibly putting the contracts on a month-to-month basis.
In remarks made at a town hall session held at a Dallas airport hotel, Matz discussed the corporate restructuring fallout hitting on CU pricing concerns by telling the gathering of CEOs and directors that during the 24-month operation of bridge corporates the agency may "honor current pricing for the period" on a monthly cycle.
Her comments were directed to CUs that have contracts with the conserved Southwest Corporate FCU.
In her talk, Matz once again cautioned against hasty decisions by CU boards as she also outlined the latest timetable for the corporate restructuring.
Matz said Southwest Corporate is due to make the transition to a bridge corporate sometime in November.
"Credit unions don't have to act now," she stressed. She acknowledged that CU directors do need further education about the corporate system resolution plan and the various options that are available.
Noting that Southwest Corporate is in the process of forming its own advisory panel of CU executives, she urged the volunteers to "wait for your credit union CEO peers to come up with system solutions before taking any individual action."
Regarding education on corporate developments, she noted that the NCUA currently has a three-part DVD dealing with options and that a fourth installment, now up on the NCUA website, will be sent to credit unions in November.
During her Texas presentation, Matz highlighted the three corporate crisis corrective action phases: stabilize system liquidity, resolve problem credit unions and reform the corporate system.
The Sept. 24 plan "took a long time to put together, and staff worked night and day on it," said Matz. "Our primary goal when we put this together was to protect consumers. We wanted no loss to taxpayers."
Matz also pointed out that the agency wanted to ensure that there was no interruption of payment services and maintain the safety and soundness of the industry.
"The status quo was not an option," commented Matz. "The fact is these five corporates put under conservatorship were not viable."
Also addressing the group was Scott Hunt of the NCUA's Office of Corporate Credit Unions and Larry Fazio, deputy director of the NCUA. Both stressed the agency's commitment to creating a workable regulatory framework to support the payments system.
"We aren't out of the woods yet and we need your shares to stay in the system," Hunt said, stressing that current deposits should be maintained for up to six months until the securitization process is complete. This would avoid creating liquidity strains that could cause further losses.