NASCUS Preparing Comments on NCUA Proposed Rule Governing the Corporates
February 4, 2010 NASCUS is working on its comment letter regarding the National Credit Union Administration's (NCUA) proposed rule governing the corporates. Comments are due to the agency by March 9.
The proposed rule regarding corporate credit unions makes changes to five main areas: corporate credit union capital, investments, asset liability management, governance and credit union service organization (CUSO) activities.
A task force of NASCUS state regulators met regularly with NCUA during the Agency's rule writing process to provide feedback and input from the state regulator perspective. Since publication on the rule, NASCUS has held various teleconferences with its Legislative and Regulatory Affairs and state regulators as it develops its comments for the agency.
The 253-page proposed rule imposes increased capital requirements and seeks greater consistency with Basel I requirements followed by banks. The proposed rule also restricts certain investments, institutes guidelines for concentration risk and asset-liability management and limits the activities of corporate credit union service organizations (CUSOs). The regulation also dictates guidelines for corporate governance of corporate credit unions. A full summary of the proposed rule is available at this link.
In its forthcoming comment letter to the agency, NASCUS will focus on areas of the proposed rule specifically impacting state-chartered corporates and the overall supervisory plan for the corporate credit union system. Regarding corporate governance, NASCUS will likely reemphasize the need for greater deference to state law for state-chartered corporates and caution against the continued homogenization of the corporate credit union system. NASCUS will also likely comment on the reliance on credit rating agencies, concentration and investment limits and state regulator consultation.
Further, NASCUS will discuss the regulation and examination of the corporate credit union system, focusing on the importance of state and federal regulator collaboration and systemic risk mitigation.
NASCUS will post its comment letter here on the NASCUS website when available to the public.