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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 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 Board said the report “augments and validates” information received from the NCUA and NCUA Director of Public and Congressional Affairs John McKechnie said many of the consulting firm’s recommendations were based on policy options presented by NCUA staff members.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. While there had been concerns about the health of corporate unions last year, the board issued its stabilization plan on Jan. 28, two days after finding out from U.S. Central that the company planned to report a $1.1 billion loss for 2008.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 should also define what core and noncore activities are for corporate credit unions and define which entities should provide the noncore activities, according to the report.The agency plans to issue a proposal, possibly later this year, for restructuring the corporate credit union system.The NCUA has requested input from the public by April 6.–[email protected]

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