President Signs Bill Into Law Directing Study of NCUA Corporate Fallout
Jan. 6, 2011 This week, President Obama signed bill S. 4036, now a law, directing the Government Accountability Office to conduct a study of the National Credit Union Administration's (NCUA) supervision of corporate credit unions and implementation of prompt corrective action (PCA). The bill also amends the Federal Credit Union Act to allow Section 208 assistance to be counted towards net worth.
The study must include the reasons for the failure of any corporate credit union since 2008 as well as an evaluation of the adequacy of the NCUA's response to the failures. Further, the report will evaluate the effectiveness of PCA implementation and examine whether the NCUA has followed recommendations from Material Loss Review Reports of the NCUA Inspector General.
Following completion of the study, it will be transmitted to the House Financial Services Committee, the Senate Banking Committee and the Financial Stability Oversight Council. The GAO has one year to complete the study, due by January 4, 2012.
The law also includes technical corrections allowing the NCUA to pay down the Temporary Corporate Credit Union Stabilization Fund without borrowing from the U.S. Treasury and to calculate the equity ratio solely on the unconsolidated statements of the National Credit Union Share Insurance Fund (NCUSIF).
To view the text of the bill, follow this link.