Positioned For the Future
In the Oct. 27 issue, former NCUA Chairman Dennis Dollar posed a series of thought-provoking questions for credit unions to ask their corporate credit unions ("Five and Ten: Top Questions to Ask Your Next Corporate," page S-4). Dollar's article brings up important issues credit unions need to address, ranging from each corporate's future business model and risk management to how it will generate income and support infrastructure under new regulations.
At Mid-Atlantic Corporate Federal Credit Union, we take these questions seriously. We are ready and able to meet credit unions' financial service needs and have made our responses to Dollar's ten questions available at www.midatlanticcorp.org.
Because Mid-Atlantic Corporate has continuously adhered to conservative investment practices, we have none of the risky investments that have caused problems at failed corporates, including no long-term impairments. Our longstanding investment policy of "safety, liquidity and then yield" remains in place for the future. And, as we noted in our response, we don't sacrifice safety for a few basis points.
Last January-long before the NCUA published the final rule for corporate credit unions-Mid-Atlantic Corporate put in place its future business plan, which more than 650 credit unions from around the country have supported by contributing more than $120 million in capital. As a result, we have already positioned ourselves to not only meet the requirements in the new rule but also our members' needs through a cost structure and capital plan they have approved earlier this year. The business model offers credit unions four different levels of membership to choose from, each with its own capital requirement, so credit unions' individual needs are satisfied.
We appreciate Dollar capturing the tough questions credit unions need to ask. One of his key questions deals with a corporate's ability to raise the necessary capital to comply with the new regulation. We responded as follows: Mid-Atlantic Corporate put its new capital plan into action even before the final revised corporate regulation was published. We are currently able to meet the leverage ratio and both risk-based capital ratios. We fully expect to be able to meet the retained-earnings ratio prior to the deadline of Oct. 20, 2013.
Jay R. Murray
Mid-Atlantic Corporate FCU