ARLINGTON, Va.—NAFCU has sent a comment letter to NCUA on its proposed rule to amend Part 704 of its regulations on corporate CUs in which the trade group outlines both the components it supports and those over which it has concerns.
Written by Regulatory Affairs Counsel PJ Hoffman, NAFCU said it supports clarification of the definition of “retained earnings,” which will allow two corporate credit unions to merge and count retained earnings toward the new institution’s net worth. It further supports clarification that grandfathered investments would still be subject to the corporate rules that apply to credit risk management, asset and liability management, liquidity management and investment action plans, and it also backs the expansion of the level of secured lending for corporate credit unions from 100% of capital to 150% of capital.
But NAFCU said it is concerned about whether credit unions will receive repayment for the assessments they paid into the Temporary Corporate Credit Union Stabilization Fund.
“Natural person credit unions have paid more than $4.8 billion in assessments,” Hoffman wrote. “While NAFCU commends NCUA for its vigilant and aggressive pursuit of legal recoveries, we believe that credit unions deserve to be repaid for the hefty assessments they paid to cover the cost of the corporate losses on mortgage-backed securities.”
The letter also calls for more clarity on the disposition of assets held by the Asset Management Assistance Center.
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