The NCUA has given credit unions a rare opportunity to let the regulator know what they think about its plans for the system's money.
The NCUA proposes to merge the Temporary Corporate Credit Union Stabilization Fund into the National Credit Union Share Insurance Fund and is accepting comments through Tuesday, Sept. 5.
Although the merger idea on the surface is a good one, the devil is in the details.
The regulator proposes to hold back from credit unions perhaps $1.8 billion of the $2.2 billion to $2.4 billion the corporate bailout fund would be worth at that point.
NCUA staff says that would be prudent, protecting the share fund against the liabilities it would take on from the corporate credit union bailout fund.
The NCUA has consistently overestimated risk in both funds and then assesses credit unions based on those faulty assumptions.
The NCUA has steadily boosted its own budget using the profits it makes from investing credit unions’ money instead of lowering the assessments it makes on the industry.
The current NCUA board has shown a willingness to listen to credit union input. Check out the links here for more information on the issue as well as instructions and a sample letter to send comments to the NCUA.
If the board doesn’t hear a strong voice from the industry, it will assume there’s no issue, and it will approve the staff recommendations.
That will cost natural person credit unions billions of dollars that should be used to return value to members.
An ethical, responsible merger of these two funds would not only restore capital to credit union members, it would also create additional positive outcomes, such as:
It would reset and renew the NCUA’s relationship with the movement.
It would return the NCUSIF to its original intent: Ensuring a safe harbor for credit union members’ capital as the backbone of a thriving, relevant cooperative financial services movement.
Download Sample Comment Letters