WASHINGTON – The General Accounting Office will be looking at credit unions and NCUA in a report to be unveiled next year. With the Enron’s and WorldCom’s existing in the American marketplace, citizens have questioned was the government asleep at the wheel and how do we prevent these types of problems from occurring again. Senate Banking Committee Chairman Paul Sarbanes (D-Md.) explained to attendees of NAFCU’s Congressional Caucus last week that his committee has done a lot of work on oversight of the financial services sector following the Enron/WorldCom, etc. troubles. As part of its routine oversight work, Sarbanes has asked the GAO to look into NCUA and credit union practices. He expects the report on his desk sometime next year. GAO Managing Director of Financial Markets and Community Investment Thomas McCool notified NCUA Inspector General Frank Thomas of the study via an August 30, 2002 letter. The review will focus on some very basic things, but also some potentially controversial items. The report will study the following: * Safety and soundness of the credit union industry, including analysis of the industry’s financial condition and review of NCUA oversight; * Impact of the Credit Union Membership Access Act of 1998, including ways in which credit unions utilize multiple common bond and community charter authorities and implementation of capital and prompt corrective action requirements; and * Extent to which credit unions carry out their mission required by the Federal Credit Union Act. McCool wrote that he would contact NCUA shortly to schedule entrance conferences to discuss the review and information needed from the agency. NCUA Chairman Dennis Dollar issued a statement upon learning of the study, which stated, “NCUA welcomes the opportunity the GAO study provides us to tell our story and get into the public domain some of the credit union success stories of recent years, ranging from record levels of net worth to the extension of access to lower-cost financial services to over 30 million Americans living in underserved areas. “I am quite proud of how effective we have been at NCUA in fulfilling both the letter and the spirit of the Federal Credit Union Act and the Credit Union Membership Access Act. I have instructed all of our NCUA department heads to fully cooperate with the GAO study and am confident that our entire agency leadership feels this study, our most recent since the Treasury Department studies of 1997 and 2001, is a tremendous opportunity to again re-affirm the overall effectiveness of NCUA as an independent regulator and insurer of America’s credit unions with an outstanding record of accomplishment in areas of responsibility ranging from safety and soundness to extension of credit union services to more folks from all walks of life.” Sarbanes observed that the last GAO review of NCUA was more than 10 years ago. Additionally, in his speech at NAFCU’s Congressional Caucus, the 26-year senator outlined his support of issues of interest to credit unions such as the PATRIOT Act regulations, financial education, and extending service to the unbanked. However, Sarbanes also noted that he does not support the bankruptcy reform legislation in its current form because its lacks sufficient consumer protections, adding that he was concerned about lenders “pushing” credit cards on people. [email protected]

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