The NCUA announced last week at its monthly board meeting that credit unions' assessment for the Temporary Corporate Credit Union Stabilization Fund would be a mere eight basis points. The total bill for credit unions comes to $701 million, or approximately $100,000 on average per credit union, for 2013. It's the lowest level it's been since the inception of the TCCUSF.

At the same time, the NCUA touted cutting $2.5 million from its budget, saving credit unions about $400 on average. The positive spin does not come close to outweighing the negative, but it's a start.

While credit unions are having to lay employees off or cut back their hours, or even cut member services to hit their numbers, the NCUA added yet another employee this year. It has an endless supply of funding: your credit union's money. And if that's not enough, it's backed by the full faith and credit of the federal government.

Larry Fazio, NCUA director of the office of examination and insurance, tipped his hand that possibly the NCUA Board could consider slowing or even stopping, at least temporarily, the assessments entirely. The mention at the board meeting was an excellent sign for credit unions' bottom lines that the agency is acknowledging the light at the end of the tunnel.

Naturally, Chip Filson had something to say on the eve of the assessment announcement. He urged the NCUA to demonstrate itself as a “thoughtful and learning” agency, and delay the 2013 corporate assessment. He pointed out that the financial statements of the five corporates that were bridged showed reserves of approximately one-quarter of the troubled assets, or $11.6 billion of the $43.8 billion. The market said the assets were only worth $28 billion, resulting in an over-collateralization of $15.8 billion, or 56% more than the NCUA Guaranteed Note balances, according to Filson. What he now questions is whether the 2010 assumptions used to create this program work in 2013. No, he argues that prior to the assessment the corporate fund is collateralized at 149% between the $27.3 billion in investments, $4.1 billion in previous premiums and the $6.4 billion in assessments.

Yet, the assessment remains. And we all recall that feeling in the pit of our stomachs in 2010 when the U.S. Central, WesCorp, Members United, Southwest and Constitution corporates were seized. It's rare that credit unions rate high-profile coverage in The Wall Street Journal, but they did then. The confusion even among mainstream business reporters about credit unions was rampant and problematic, for example, The Financial Times reported, “Rescue of U.S. credit unions launched.” In the broadest possible sense, I supposed that's true, and the article does immediately explain the difference, but think of how many readers didn't make it past that headline.

Headlines like, “Standoff ends, search begins for credit union CEO wanted for fraud,” in the local Ohio news around Taupa Lithuanian Credit Union are why credit unions need to drop the flying-under-the-radar philosophy. No matter what you do at your credit union, there's nothing stopping the news that a credit union CEO turned fugitive-who the FBI wanted poster notes “should be considered armed and dangerous [and] may have suicidal tendencies”-will be kept from your members. (Given that Alex Spirikaitis ran a $23.6 million credit union, it will also make it hard for the NCUA to exempt small credit unions from certain rules and requirements.)

As I wrote last week, reputational risk can be bigger than the dollars involved, and public relations are critical.

Online anyone can know anything in the second it happens, from a website posting to a breaking news tweet. Public relations is not something individual credit unions can afford to avoid any longer. Just because you aren't involved in social media doesn't mean your members are not. It could be disastrous if your credit union starts getting calls about misinformation that's already spread to thousands in social media and the credit union has no idea what they're talking about.

A strategic public relations plan takes a lot of legwork. It includes cultivating solid working relationships over time with your local news outlets, trade publications (of course), and even a few national news outlets. When the worst happens, such as internal fraud or robbery, credit unions must know what to do and say and who will say it, during and following a crisis. And for goodness sake, include your PR executive's contact information on your website and press releases.

Sarah Snell Cooke
Publisher/Editor in Chief
scooke@cutimes.com

Instant Insights /

Spin Can&rsquo;t Shield Spendthrift NCUA: Editor/Publisher's Column

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