When Jim Riederer, CEO of CME Federal Credit Union in Columbus, Ohio, read the draft NCUA regulations pertaining to equitable distribution of corporate credit union stabilization expenses (section 702.41 in a document dated Nov. 18), he could feel his anger rising. "It is unfair and it is arbitrary," he said. But he did not stop with expressing his annoyance.
On Jan. 5 he circulated a letter to some 70 Ohio credit unions strenuously opposing the proposed regulation. "I already have six signatures, just in the first 24 hours," Riederer said. "Nobody has told me they won't sign."
He said his primary sticking point with the NCUA language is that it allows corporate credit unions to oust non-federally insured credit unions that decline to participate in "voluntary" recapitalization, "and that just is wrong."
The NCUA's language mandating that a corporate hold a meeting where members vote on the possible ouster of the non-paying entity is unnecessarily burdensome, Riederer said. "It is arbitrary," he added.
An underlying issue is that NCUA lacks authority to assess non-federally insured credit unions and the 702.41 language seems to some, Riederer said, to be a backdoor way to impose assessments regardless. A further concern is that the assessments might lead to erosion of corporate credit union membership. "We need corporates, no question," Riederer said. "How NCUA is going about this is not right."
Riederer stressed that the letter is in no way in opposition to Corporate One Federal Credit Union, the Columbus-based corporate with which CME has traditionally done the bulk of its business. "We are very happy with Corporate One, it is not a corporate that is in trouble," he said. "The letter in fact is meant as supportive of Corporate One."
He stressed that Corporate One had "no involvement in circulating this letter."
Riederer's intent is to present NCUA with the letter once he has as many signatures as he thinks it likely he will get."We want to go on record with our opposition."