The NCUA announced last week at its monthlyboard meeting that credit unions' assessment for the TemporaryCorporate Credit Union Stabilization Fund would be a mere eightbasis points. The total bill for credit unions comes to $701million, or approximately $100,000 on average per credit union, for2013. It's the lowest level it's been since the inception of theTCCUSF.

At the same time, the NCUA touted cutting $2.5 million from itsbudget, saving credit unions about $400 on average. The positivespin does not come close to outweighing the negative, but it's astart.

While credit unions are having to lay employees off or cut backtheir hours, or even cut member services to hit their numbers, theNCUA added yet another employee this year. It has an endless supplyof funding: your credit union's money. And if that's not enough,it's backed by the full faith and credit of the federalgovernment.

Larry Fazio, NCUA director of the office of examination andinsurance, tipped his hand that possibly the NCUA Board couldconsider slowing or even stopping, at least temporarily, theassessments entirely. The mention at the board meeting was anexcellent sign for credit unions' bottom lines that the agency isacknowledging the light at the end of the tunnel.

Naturally, Chip Filson had something to say on the eve of theassessment announcement. He urged the NCUA to demonstrate itself as a “thoughtful andlearning” agency, and delay the 2013 corporate assessment. Hepointed out that the financial statements of the five corporatesthat were bridged showed reserves of approximately one-quarter ofthe troubled assets, or $11.6 billion of the $43.8 billion. Themarket said the assets were only worth $28 billion, resulting in anover-collateralization of $15.8 billion, or 56% more than the NCUAGuaranteed Note balances, according to Filson. What he nowquestions is whether the 2010 assumptions used to create thisprogram work in 2013. No, he argues that prior to the assessmentthe corporate fund is collateralized at 149% between the $27.3billion in investments, $4.1 billion in previous premiums and the$6.4 billion in assessments.

Yet, the assessment remains. And we all recall that feeling inthe pit of our stomachs in 2010 when the U.S. Central, WesCorp,Members United, Southwest and Constitution corporates were seized. It's rare that credit unionsrate high-profile coverage in The Wall Street Journal, but they didthen. The confusion even among mainstream business reporters aboutcredit unions was rampant and problematic, for example, TheFinancial Times reported, “Rescue of U.S. credit unionslaunched.” In the broadest possible sense, I supposed that'strue, and the article does immediately explain the difference, butthink of how many readers didn't make it past that headline.

Headlines like, “Standoff ends, search beginsfor credit union CEO wanted for fraud,” in the localOhio news around Taupa Lithuanian Credit Union are why creditunions need to drop the flying-under-the-radar philosophy. Nomatter what you do at your credit union, there's nothing stoppingthe news that a credit union CEO turned fugitive-who the FBI wantedposter notes “should be considered armed and dangerous [and] mayhave suicidal tendencies”-will be kept from your members. (Giventhat Alex Spirikaitis ran a $23.6 million credit union, itwill also make it hard for the NCUA to exempt small credit unionsfrom certain rules and requirements.)

As I wrote last week, reputational risk can be bigger than thedollars involved, and public relations are critical.

Online anyone can know anything in the second it happens, from awebsite posting to a breaking news tweet. Public relations is notsomething individual credit unions can afford to avoid any longer.Just because you aren't involved in social media doesn't mean yourmembers are not. It could be disastrous if your credit union startsgetting calls about misinformation that's already spread tothousands in social media and the credit union has no idea whatthey're talking about.

A strategic public relations plan takes a lot of legwork. Itincludes cultivating solid working relationships over time withyour local news outlets, trade publications (of course), and even afew national news outlets. When the worst happens, such as internalfraud or robbery, credit unions must know what to do and say andwho will say it, during and following a crisis. And for goodnesssake, include your PR executive's contact information on yourwebsite and press releases.

Sarah Snell Cooke
Publisher/Editor in Chief
[email protected]