NCUA Audit Stokes an Uproar
Audits typically are prosaic matters, filed by accountants, read by accountants and swiftly forgotten. Not so the recent audit of NCUA’s Temporary Corporate Credit Union Stabilization Fund, announced by the agency on Dec. 27, a day when many are on vacation.
Despite the timing of the release to coincide with a nationwide gap in attention, a firestorm has erupted about the audit and, more broadly, the NCUA’s handling of the huge losses incurred in the meltdown of five corporate credit unions that the NCUA conserved in 2010.
Haunting just may be the apt word. Pete Duffy, managing director at Sandler, O’Neil, said that a continuing concern at the larger credit unions where he consults is that “the wide bandwidth and uncertainty about how potential losses are calculated.” He elaborated that his clients have been contemplating sizable investments–opening new branches, for instance–but a roadblock for some has been the uncertainty about the losses and how deep individual credit unions may have to dig.
A senior executive with a corporate credit union, who requested anonymity because he was not authorized to speak on the record on behalf of his institution, said the estimates offered by the NCUA are inherently vague.