CUNA Attorneys Meet with NCUA Attorneys on Agency's Subprime Indirect Lending Risk Alert Letter

CHICAGO - After meeting with NCUA attorneys for three hours the week of Aug. 15 to discuss NCUA's recently issued Risk Alert letter on CUs' involvement with third party vendors for making subprime indirect loans and what CUNA attorneys felt was the "heavy handed" implementation taken by the agency on the letter, CUNA President/CEO Dan Mica is confident "we'll get it straightened out." Participating in a Credit Union Leadership Forum at the NASCUS Annual Conference (see full coverage on pages 44-52) and joined by NASCUS President/CEO Mary Martha Fortney, NAFCU President/CEO Fred Becker, and AACUL Executive Director Susan Newton, Mica said CUNA felt that NCUA used some "misguided procedures" when it issued its Risk Alert letter. "CUNA does not endorse Centrix or any other subprime indirect lender. But the process of the federal regulator got out of hand," said Mica. The CUNA leader said NCUA's letter only applied to a handful of credit unions involved in indirect lending and the agency sent examiners to credit unions involved with any kind of subprime lending, even those that had nothing to do with the problem. "The phones were ringing off the hooks at CUNA and the league offices with credit unions saying NCUA shouldn't have gone after the entire credit union movement," said Mica. Mica said NCUA leadership told CUNA "that wasn't what they intended." In a follow-up discussion with CUNA's Mark Wolff, the senior VP of communications told Credit Union Times "if this continues to be an issue, CUNA expects it will have further discussion with NCUA." -ebarr@cutimes.com