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April 8, 2008 - As the guest speaker at the Metropolitan Area Credit Union Management Association (MACUMA) lunch meeting on April 7, NASCUS President and CEO Mary Martha Fortney emphasized to a mostly federal credit union audience to continue to be mindful of challenges to both credit union charters.
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| NASCUS President and CEO Mary Martha Fortney discusses UBIT, dual chartering and other issues at the April 7 MACUMA meeting. NASCUS photo |
Fortney was asked to discuss NASCUS’ state data collection report and how and if federal credit unions (FCUs) will be impacted with regard to topics such as unrelated business income tax (UBIT) and Credit Union Service Organizations (CUSOs). Congress requested that state regulators gather date on state credit union membership, executive compensation, UBIT and CUSOs. The state data collection report, the NASCUS Survey of the State Credit Union System, was published in December 2007.
“The data found in both the state and federal credit union reports indicated that credit unions are serving their members,” said Fortney. “It was important for Congress to know that regardless of charter type, credit unions are staying true to their purpose to serve members.” Fortney informed the audience that there were no plans to continue data collection on the state credit union level, but action by the National Credit Union Administration (NCUA) Board on its Outreach Task Force recommendations will keep data collection concerns on state regulators’ watch list.
She also noted that the NASCUS report included good news for credit unions on CUSOs; the report revealed that very little income is generated from CUSOs. The report indicated that CUSOs were used mostly for back-office operations and for member service. Fortney also informed the group that very few survey respondents indicated they had paid UBIT.
Fortney went on further about UBIT, and encouraged the federal credit union executives in the audience to stay up-to-date on UBIT issues. “While UBIT only applies to state charters, the UBIT issue is important to dual chartering – we must have a healthy state and federal charter,” said Fortney. She also added that charter challenges are not always isolated and attendees should monitor UBIT developments closely.
At the meeting, Fortney was asked about NASCUS’ response to the U.S. Treasury’s proposed regulatory blueprint. Fortney explained that the blueprint would negatively impact dual chartering and the diversity and choice provided by state and federal charters. “The dual chartering system is threatened by the preemption of state laws and the push for uniformity,” said Fortney.
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