At its second to last meeting of the year on Nov. 19, the NCUA Board is scheduled to issue its long-awaited proposed rules for revamping the structure of the corporate credit union system. The meeting will crunch some numbers for the agency's 2010 budget.
NCUA Chairman Debbie Matz has said the corporate regulations will focus on addressing issues such as capital problems, including forcing corporates to keep more in retained earnings. They will also set limits on the types of securities corporates can invest in, restrict risk concentration and impose capital standards, she added.
Matz also said the agency plans to address the issue of capital depletion and try to draft rules that try to accommodate some of the concerns that credit unions have about the impact of the corporate credit union losses on their balance sheets while satisfying all legal, policy and accounting requirements.
Also, the rules are likely to address governance issues, including requiring a majority of corporate credit union board members to be the CEO, chief financial officer or chief operating officer of a natural person credit union, annual disclosures of the compensation packages of top executives and a ban on golden parachutes for departing executives.
There will be a 60-day comment period.
The NCUA Board decided last January to issue new rules for the corporate credit union system following its decision to inject $1 billion capital into U.S. Central and a guarantee of credit union deposits at corporates. The agency received over 400 comment letters making suggestions on the new rules.
In March, the agency placed U.S, Central into conservatorship and asked Congress to create a temporary stabilization fund to allow the credit union system to spread out the replenishment of the NCUSIF over eight years. Congress passed legislation creating the fund in May.
On the budget, the agency hasn't said how much it will increase its spending above the current level of $177.8 million. But Matz said it plans to hire 57 new examiners on top of the 50 new examiners it hired this year.
The budget, which is not subject to approval by Congress, takes effect on Jan. 1, 2010.
The board is also scheduled to receive its regular report on the health of the NCUSIF.
For the results of the meeting go to www.cutimes.com on Thursday, and there will be a complete report in next week's issue of Credit Union Times.
–cmarx@cutimes.com

Instant Insights /

NCUA Board Meeting to Discuss Corporate Rules and the Agency's 2010 Budget

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