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Questions for the House Financial Services Committee's Subcommittee on Financial Institutions and Consumer Credit to discuss NCUA efforts to stabilize corporate credit unionsWednesday, May 20, 2009 2:00 PM
Credit unions are demonstrating their unique role by providing funding for mortgage, consumer and student loans at a record pace despite ongoing economic uncertainty. However, NCUA's approach to the Corporate Credit Union Network situation, which requires credit unions to record expenses based on estimated future losses, imposes an unnecessary burden on credit unions' ability to continue meeting the needs of their members and communities. Imposing such a burden at this time will only inhibit the economic recovery
Issue #1NCUA spokespersons have used widely varying estimates of the potential losses from the Corporate Credit Union Network. These have ranged from $40-$50 billion (John Kutchey- Acting Director of Examination and Insurance in a NAFCU webinar), to $7, $10, or $16 billion depending which PIMCO scenario is used (Dave Marquis, NCUA’s Executive Director), to $4.7 billion (NCUA’s initial system costs on January 28, 2009).
Issue #2If the NCUA draws upon the full $30 billion borrowing authority allowed by the legislation, the indebtedness would be equivalent to over 12 times the total 2008 net income for all credit unions. As passed, all borrowings would be repaid by NCUSIF premiums in future years, further encumbering the earnings of credit unions.
Issue #3In March 2008, WesCorp management classified a portion of its 'available-for-sale' portfolio as 'held-to-maturity'. Last month, NCUA disclosed in WesCorp's financial release that this decision is being reversed effective December 31, 2008. However, the very same footnote goes on to state, "it is our intent to hold these securities to maturity."
What Can You Do for Wednesday's Hearing?
1. Call the Subcommittee and voice your concerns:
Capitol Hill Office
Address: 2266 Rayburn House Office Bldg.
Washington, D.C. 20515
Address: 2201 W. North Ave.
Chicago, IL 60647
Email Us Your Questions for Addition
3. Contact One of the Committee Members:
Chairman: Rep. Luis V. Gutierrez (IL)
Rep. Carolyn Maloney (NY)Rep. Melvin L. Watt (NC)Rep. Gary Ackerman (NY)Rep. Brad Sherman (CA)Rep. Dennis Moore (KS)Rep. Paul Kanjorski (PA)Rep. Maxine Waters (CA)Rep. Rubén Hinojosa (TX)Rep. Carolyn McCarthy (NY)Rep. Joe Baca (CA)Rep. Al Green (TX)Rep. William Lacy Clay (MO)Rep. Brad Miller (NC)Rep. David Scott (GA)Rep. Emanuel Cleaver (MO)Rep. Melissa Bean (IL)Rep. Paul W. Hodes (NH)Rep. Keith Ellison (MN)Rep. Ron Klein (FL)Rep. Charles A. Wilson (OH)Rep. Gregory W. Meeks (NY)Rep. Bill Foster (IL)Rep. Ed Perlmutter (CO)Rep. Jackie Speier (CA)Rep. Travis Childers (MS)Rep. Walt Minnick (ID)
May 18, 2009
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