SAN FRANCISCO — The sluggish economy, which has had a serious impact on many credit unions, has caused the NCUA to have to undertake a series of initiatives to ensure the safety and soundness of the industry, NCUA Board Member Gigi Hyland said Thursday.
Hyland, who spoke at the opening session of NAFCU’s annual conference, cited the program the NCUA Board approved Wednesday allowing credit unions to prepay part of their assessments for rescuing the corporate credit unions system as an example.
She said the agency had listened to concerns expressed by credit unions by raising the minimum total contributions needed to launch the program from $300 million to $500 million. Credit unions pushed for that because they wanted to prepay more upfront and “didn’t want to kick the can down the road,’’ Hyland said.
She said the agency will hold a webinar on the program on July 11 and commitment agreements from credit unions are due on July 29. The agency will let credit unions know in August whether it has received enough commitments to launch the program.
Hyland also said the nation’s economic difficulties prompted the board to issue a proposed rule mandating that credit unions have interest rate risk proposals, and agency officials are reviewing comments that it received on that issue.
In the fall, the agency is likely to issue a proposed rule that would give the agency the right to examine third parties, such as CUSOs. Hyland said this is needed because more activities are being done by those entities and they can impact the safety and soundness of credit unions.
She also noted that while the economy is improving, challenges continue for a rapidly changing credit union industry. She noted that in the 5½ years she has been on the board the number of credit unions has declined by 2,300 but the industry’s total assets have increased.
Hyland, who is a gourmet cook, also advised attendees to take advantage of the city’s culinary reputation. “There are two rules about San Francisco. You should eat your weight in seafood and eat your weight in chocolate. Since arriving at 3:00 yesterday I have accomplished both of those goals,” she quipped.