The NCUA should not act rashly when making changes in the structure of the corporate credit union system and work with state regulators to "refine" the concentration of risk so that some of it is less concentrated, NASCUS wrote the agency.
In a letter written by NASCUS President/CEO Mary Martha Fortney, the association suggests the creation of a joint federal-state examination team to annually examine corporates deemed to a "material systemic risk."
NASCUS also recommended that corporates be mandated to retain higher capital reserves, including risk-based capital. It opposes limiting corporate charters to a specific payment services or investment services function.
Recommended For You
NASCUS also suggested that NCUA give natural person credit unions more investment authority because this could "reduce systemic risk: in some cases the investments would be isolated on a natural person credit union's balance sheet."
The organization also urged the NCUA not to limit the field of membership of corporates because any risk mitigation resulting from such an action could be offset by a loss of competitive innovation.
NASCUS also recommended that the agency be more forthcoming with state regulators. It suggests more aggregate information be made available and reevaluate the quality of information it shares with stakeholders.
NASCUS was responding to the NCUA's request for comments on the structure of the corporate credit union system. The NCUA requested the comments, which are due today, when it issued its program to stabilize the corporates in January.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
