NCUA Chairman Debbie Matz, speaking to Texas credit unionleaders as part of the agency's town hall series last week,reaffirmed an agency pledge to honor expiring service contracts CUshave with conserved corporates, possibly putting the contracts on amonth-to-month basis.

In remarks made at a town hall session held at a Dallas airporthotel, Matz discussed the corporate restructuring fallout hittingon CU pricing concerns by telling the gathering of CEOs anddirectors that during the 24-month operation of bridge corporatesthe agency may “honor current pricing for the period” on a monthlycycle.

Her comments were directed to CUs that have contracts with theconserved Southwest Corporate FCU.

In her talk, Matz once again cautioned against hasty decisionsby CU boards as she also outlined the latest timetable for thecorporate restructuring.

Matz said Southwest Corporate is due to make the transition to abridge corporate sometime in November.

“Credit unions don't have to act now,” she stressed. Sheacknowledged that CU directors do need further education about thecorporate system resolution plan and the various options that areavailable.

Noting that Southwest Corporate is in the process of forming itsown advisory panel of CU executives, she urged the volunteers to“wait for your credit union CEO peers to come up with systemsolutions before taking any individual action.”

Regarding education on corporate developments, she noted thatthe NCUA currently has a three-part DVD dealing with options andthat a fourth installment, now up on the NCUA website, will be sentto credit unions in November.

During her Texas presentation, Matz highlighted the threecorporate crisis corrective action phases: stabilize systemliquidity, resolve problem credit unions and reform the corporatesystem.

The Sept. 24 plan “took a long time to put together, and staffworked night and day on it,” said Matz. “Our primary goal when weput this together was to protect consumers. We wanted no loss totaxpayers.”

Matz also pointed out that the agency wanted to ensure thatthere was no interruption of payment services and maintain thesafety and soundness of the industry.

“The status quo was not an option,” commented Matz. “The fact isthese five corporates put under conservatorship were notviable.”

Also addressing the group was Scott Hunt of the NCUA's Office ofCorporate Credit Unions and Larry Fazio, deputy director of theNCUA. Both stressed the agency's commitment to creating a workableregulatory framework to support the payments system.

“We aren't out of the woods yet and we need your shares to stayin the system,” Hunt said, stressing that current deposits shouldbe maintained for up to six months until the securitization processis complete. This would avoid creating liquidity strains that couldcause further losses.

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