The NCUA's proposal to encourage corporate credit unions to charge fees to non-federally insured entities is contrary to the intentions of the law and the notion that such payments would be voluntary is "disingenuous.''
That's the argument the American Bankers Association makes in a comment letter it filed today with the NCUA.
ABA Vice President and Senior Economist Keith Leggett wrote that when Congress created the Temporary Corporate Credit Union Stabilization Fund in 2009 it "clearly intended for FICUs to be responsible for the repayment of advances to the TCCUSF from Treasury. The statutory language does not say that the NCUA may assess non FICUs.''
He said the proposed rule seeks to redistribute the costs to non-federally insured credit unions even though the NCUSIF and federally insured credit unions are the real beneficiaries of the TCCUSF.
Leggett also threw cold water on the idea that such payments by non-federally insured entities would be voluntary.
"To call such a premium payment 'voluntary,' is a sham. In fact, the NCUA is sending an invoice to non-FICUs and establishing a procedure to extort payments using penalties for non-compliance,'' he wrote. "Non-FICUs are being conscripted into making this payment.''
The comment period for the proposed corporate rule ends on Friday. To read the comments submitted so far, go to: