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A special message from Mary Martha Fortney, President and CEO,
March 24, 2008
 In Early March, Washington D.C. is filled with credit union leaders for the Credit Union National Association’s (CUNA) Governmental Affairs Conference. NASCUS, being local to Washington, D.C., has a short commute to the event, but is not without a packed schedule of meetings and important opportunities for dialogue on timely topics.
Each year, NASCUS’ leadership holds numerous meetings for face-to-face dialogue with system groups and the federal regulator, the National Credit Union Administration (NCUA).
It couldn’t have been a better time to sit down and discuss the many current regulatory and credit union issues with our system partners. We came away with new insights and a confirmation that it is indeed an exciting, yet challenging time for credit unions.
During the week, NASCUS leadership met with the National Credit Union Administration (NCUA), CUNA, CUNA Mutual Group, the American Association of Credit Union Leagues (AACUL), the Association of Corporate Credit Unions (ACCU) and others. While topics of discussion varied among the groups, there are several pressing issues on everyone’s minds.
Unrelated business income tax (UBIT) is a hot topic and NASCUS discussed the issue at length with system partners during the GAC. Community First Credit Union in Appleton, Wisconsin recently filed a lawsuit against the IRS asking for a refund of more than $54,000 in UBIT taxes. NASCUS and the credit union system applaud Community First for challenging the IRS. Discussion focused on implications on the credit union system, outcome of the lawsuit and next steps. NASCUS and others are closely watching the UBIT issue, including federal charters, and awaiting a positive outcome. Discussion on UBIT will continue in the coming months.
Capital reform is also top of mind for many in the credit union industry. One of NASCUS’ priorities is achieving capital reform and complete capital modernization. We found that others in the credit union industry share our concern that credit unions cannot rely on just retained earnings to build capital. NASCUS supports a risk-based capital system for credit unions including access to alternative capital. We understand that achieving capital reform will be a comprehensive process and building consensus in the system is critical to moving forward. NASCUS will continue to work with our system partners to accomplish the capital reform necessary for credit unions to continue growing and thriving.
As you can imagine, there wasn’t one meeting where NASCUS didn’t discuss the economic challenges and the mortgage crisis. Credit unions have provided critical support to consumers facing foreclosure and mortgage trouble. During our meetings, regulators and credit union executives shared what’s working in their states and compared it to trends in the mortgage market nationwide. NASCUS will continue to foster the dialogue and best practice sharing necessary to tackle these challenging economic times.
NASCUS maintains a healthy working relationship with NCUA, and several times throughout the year, our Board of Directors meets with NCUA Board members and senior staff to address emerging issues. We had the opportunity to meet with all three Board members during the GAC for valuable dialogue on regulatory, examination and supervision issues. In early April, state regulators and NCUA will meet for its National Regulators Meeting in Tampa to continue discussion on national policy issues. The in-person dialogue among state and federal regulators is necessary in maintaining a safe and sound credit union system. NASCUS looks forward to continued discussions.
Other issues and concerns landed on our meeting agendas including interstate branching, proposed regulations, conversions, mergers, corporate governance…and the list goes on. NASCUS will continue to collaborate with its system partners to address the critical issues facing state regulators and credit unions.
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