The NCUA's plan to guarantee deposits at corporate credit unions-which could result in a premium levied on natural person credit unions-was one of the recommendations made by a consulting firm hired by the agency last year.
The NCUA today released a summary of a report by PriceWaterhouseCoopers, which also recommended using the Central Liquidity Facility to infuse liquidity in corporate credit unions, an action that would require congressional approval. The NCUA, CUNA and NAFCU have been discussing how to make such a request to lawmakers.
The NCUA hired the firm last November and it submitted its report on Jan. 16. Less than two weeks later, the NCUA issued its Corporate Credit Union Stabilization Plan, which included the deposit guarantee and also included a $1 billion capital injection in U.S. Central.
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The PriceWaterhouseCoopers report also said that the capital situation at corprorates could be improved by: creating a central pool of lower rated securities, limiting new investment activity, making natural person credit union participation in corporates contingent on providing paid-in capital, and using well-capitalized natural person credit unions provide capital to corporates on a voluntary basis.
It also urged the NCUA to examine all options for restructuring the credit union system and recommended that that the agency develop a comprehensive risk assessment system for corporate credit unions.
The NCUA has requested input by April 6 on ways that the corporate credit system can be restructured and that oversight can be improved.
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