By Carrie Hunt
In a recent letter, former NCUA chairman Michael Fryzel wrote a very odd editorial criticizing NAFCU's board, regulatory committee, and share insurance committee for simply disagreeing with the NCUA's proposal regarding the closure of the stabilization fund.
Our board and committees are comprised of credit union executives, staff, and volunteers representing credit unions of various charter types, asset sizes, and geographic regions. It seems as though Mr. Fryzel, or his writer, did not take the time to sufficiently understand NAFCU's position.
To better clarify why NAFCU is not on board with the NCUA's proposal at this time, here are a few key points:
- NAFCU strongly supports credit unions receiving refunds from the stabilization fund as soon as practical, so long as it is done in a fair manner. Under NCUA's plan, credit unions that did not pay assessments would benefit at the expense of those who did.
- NAFCU's members still have many relevant questions and concerns with the NCUA's proposal, including a detailed assessment of whether the remaining NGNs will increase or decrease in value.
- It is illegal under the FCU Act to use premiums to increase the equity ratio above 1.3%, yet NCUA is doing just that with their plan. Also keep in mind, 1.39%would represent the highest normal operating level in the history of the NCUSIF if implemented. Even during the financial crisis it was not this high.
- Under NCUA's plan, about $900 million will be kept in the NCUSIF instead of being returned to credit unions.
- NAFCU has always supported a strong NCUA and a strong share insurance fund. There is no proof showing otherwise.
Strong Credit Unions Make for Strong NCUA
NAFCU appreciates NCUA's efforts to propose the merging of the funds and solicit industry feedback. We hope they will take all the comments into consideration and proceed judiciously based on those comments.
Mr. Fryzel does not name NAFCU in his letter but makes it clear he believes our position on the matter is self-serving. While we respect his right to an opinion, we strongly disagree. And the growth in our membership number tells us the industry does, too. Everything we do is focused on advocating on behalf of our members' interests and, in the case of NCUA's proposal, ensuring our members' money is being used appropriately. Such a proposal should be done with care and consideration to all credit unions, because strong credit unions make for a strong NCUA.
To put it plainly, our position was decided by members, for members. Period.
Carrie Hunt is EVP of Government Affairs/General Counsel with NAFCU.