The NCUA's final town hall meeting, a Webcast that allowed viewers to ask live questions anonymously, presented new questions to Chairman Debbie Matz and her staff that weren't asked in previous events.
Topics strayed beyond corporate restructuring into unvetted territory, including one viewer's complaint about the NCUA's new online 5300 reporting system, which was slow in its debut week.
Deputy Director Larry Fazio called it a "peak volume" issue, saying the NCUA considered volume processing issues before launching the new system, but the week's volume spiked far beyond historical peaks.
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"We addressed some software and hardware issues, and I'll go out on a limb and say it will be smooth as glass for the Dec. 31 reporting cycle," he said.
Other noncorporate questions included one about the lengthy process of applying to convert to a community charter. Matz admitted the process needed revision, saying she had just reviewed a 775-page application that weighed more than 10 pounds. Calling applications of that size "not a good use of anyone's resources," she announced the board will consider new field of membership regulations during its December meeting that will provide "a metric formula" that specifies the definition of a community.
General Counsel Bob Fenner fielded a question about courtesy pay and alternatives to payday loans, saying there's a possibility the NCUA might work out a slightly higher interest rate cap and appropriate fee limits for "short-term, small-dollar loans" so credit unions could "at least break even" while helping members break a cycle of dependency upon for-profit payday lenders.
Matz said it's important credit unions provide an alternative to payday lenders without assuming losses and echoed Fenner's desire that those who choose to provide the service "at least break even."
Office of Corporate Credit Unions Director Scott Hunt said the NCUA will continue to determine, on a quarterly basis, whether or not to continue the corporate share guarantee. Currently, share guarantees expire in December 2011, but the regulator could extend that to December 2014.
Hunt said the NCUA does not feel the corporate system is stable enough to lift the guarantee and said he can't commit to any additional extensions but said it's likely until additional corporate stability is achieved.
Proposed corporate rules may include prompt corrective action guidelines for corporates, so the NCUA will have better supervisory tools to deal with declining capital ratios, Fenner said.
He also confirmed the agency is contemplating a 10% cap on corporates receiving funding from any source, deposit or loan. However, he said the NCUA recognizes some corporates can't currently comply with that cap, and those corporates would be phased in or given a chance to submit an action plan.
Fenner also said new corporate rules may include a requirement that the majority of the board be representatives of natural person credit unions, but that doesn't mean the end of U.S. Central.
"That doesn't mean U.S. Central or some other coporates could not exist to primarily provide services to other corporates," Fenner said, but the institution might still be required to elect a board of primarily natural person credit union senior executives, "because that's who the corporate system was created to serve."
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