Credit unions holding capital in the conserved corporate credit unions should be able to share in the future recoveries of securities and the NCUA should instruct its examiners to allow credit unions more flexibility in developing plans to rebuild their net worth.
Those are among the requests that CUNA President/CEO Dan Mica made in a letter he sent yesterday to NCUA Chairman Michael E. Fryzel.
Mica said that allowing credit unions to share in future recoveries was preferable to requiring some or all of the capital accounts in Western Corporate Federal Credit Union and U.S. Central Corporate Federal Credit Union to be extinguished.
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He also said that greater flexibility in rebuilding net worth is needed because even though NCUA officials have promised credit unions they won't be subject to "harsh treatment" in this area, some examiners have forced well-capitalized credit unions to develop plans to restore their net worth to what it was before the NCUSIF assessments to pay for the corporate credit union rescue.
Mica also urged Fryzel to establish a reporting system to give credit unions information on the performance of securities held by U.S. Central and Wescorp. The agency should also develop investment policies with a goal of holding on to investments long enough to minimize losses, Mica added.
Mica also reiterated his request to support the use of the Central Liquidity Facility for corporate credit unions.
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