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ALEXANDRIA, Va.-NCUA dealt with a handful of key issues during last week’s board meeting, including deposit insurance updates, two community charter conversions, and strategic planning. In line with the FDIC and accordance with the Deposit Insurance Reform Act, the NCUA Board unanimously approved an interim final rule to modernize deposit insurance coverage for federally insured credit unions. The FDIC approved its interim final rule earlier in the week. The rule defines the “standard maximum share insurance amount” as $100,000, indexed to inflation every five years as set by the NCUA and FDIC. It also increases coverage for certain retirement accounts to $250,000 effective April 1, 2006. NCUA Staff Attorney Frank Kressman said he did not know how much affected credit unions would have to add to their deposit insurance premiums. “We don’t anticipate that to be a major financial burden for credit unions though,” he said. It will also provide pass-through coverage in well-capitalized credit unions for employee benefit plans regardless of membership status. Kressman cited congressional intent as justification for this change though the law was not conclusive in its language. The agency is seeking comment on how this provision of the interim rule should be handled. It was issued with a 60-day comment period. In addition, NCUA’s interim regulation clarifies insurance coverage for qualified tuition savings programs and share accounts in foreign denominations, which should only affect a handful of credit unions. The board members noted that an intensive education effort will be necessary to explain the deposit insurance updates to the public and the varying coverage levels. NCUA is already taking steps having held a joint meeting with FDIC for related trade associations and updating its Your Insured Funds online and hard copy brochures. NCUA will also be updating its 5300 report, share insurance calculator, and official signage to include the “full faith and credit” language. “In my experience with NCUA,” Kressman said, “there has never been a time where we’ve been so tied legislatively with the FDIC.” He said the working relationship is going very well. The NCUA Board also approved two community charter conversions with 3-0 votes. Tri-Boro Federal Credit Union, with $91 million in assets and a 51% penetration rate, was approved to convert from a 180 select employee group institution to a community charter encompassing Allegheny and Washington Counties in Pennsylvania. The approved community has a population of nearly 1.5 million. Pittsburgh is the common hub of the community with the next nearest large city, Cleveland, Ohio, over 100 miles away. The credit union already has three full-service facilities and plans to join five area service centers and a local ATM network with 50 machines upon conversion. Tri-Boro also plans to target the low-income areas of the community with $5 minimum share accounts, micro-loans, $250 credit cards, and risk-based lending. The institution has also begun involvement in small business lending and other services. NCUA Vice Chairman Rodney Hood acknowledged that community charters had been held up at the agency with the changing of the guard at the board. “But, it’s given us time to really ensure we have clearly defined communities,” he said. Particularly with the Tri-Boro application, he was impressed-as a former community development lender-with the $100 micro-loans that are typically “cost-prohibitive” and members will not be able to get anywhere else. Overlaps in field of membership were noted but Hood said, “That doesn’t bother me because it’s all about consumer choice.” Central Florida Educators Federal Credit Union was also granted a 1.9 million resident community charter at last week’s meeting. The field of membership is made up of the Orlando metropolitan statistical area, including Orange, Osceola, Seminole, or Lake Counties, Fla. NCUA Chairman JoAnn Johnson, a former teacher, was impressed with how the credit union would still be going to its educational roots, donating half-a-million dollars to schools in the next five years and providing credit counseling and the Money Smart program in the schools. Board Member Gigi Hyland noted the importance of the credit union’s work with the Latino community in the area and marketing in Latino news outlets, and Hood pointed out Central Florida Educators’ bilingual efforts. The board also considered the strategic plan and more focused annual performance budget for the agency. The annual performance plan is designed to provide near-term, agency-wide direction and supplement the strategic plan, which is broader and focused a few years down the road. Public comments on the proposals for the two were generally favorable and staff was able to work in some of the recommendations made. Both were streamlined for efficiency and easier understanding, which received favorable responses from both inside and outside the agency. “It’s a very concise document. It’s very clear.” Johnson said of the annual performance budget. “I believe this plan is going to help us be more responsive.” -

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