Today's NCUA corporate update addressed some of the controversies surrounding last week's regulatory actions.
NCUA Chairman Michael Fryzel specifically addressed the decision to hire account management firm PIMCO, which manages the world's largest bond fund, to independently valuate corporate securities.
"There is no reason to question PIMCO's integrity and independence," he said. "NCUA selected PIMCO not only due to its expertise, but because it had not sold any of the bonds being analyzed and was not engaged in providing any other services to the corporate credit unions. Any firm with the expertise to evaluate these bonds is a potential purchaser. However, there is no conflict of interest given NCUA's intention to hold these securities to maturity; in fact this course of action was recommended by PIMCO."
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The agency reported meeting with corporate members to "enhance ongoing confidence in the continued operations" and said conservatorship boards and new CEOs will continue to host periodic teleconferences and town hall meetings to keep communication lines open.
NCUA has also amended corporate membership policies that require member credit to replenish membership capital accounts.
The report also took a dig at corporate executives, stating that CEO and senior management contracts have been repudiated, all senior management bonus plans have been suspended, and executive perks such as country club golf memberships have been cancelled.
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