Matz Reiterates Support for Supplemental Capital, Estimates 8-11 Basis Point Corporate Assessment for 2012

Nov. 10, 2011 - National Credit Union Administration (NCUA) Chairman Debbie Matz held a online "Town Hall" with more than 2,400 attendees on Nov. 9 to discuss issues of interest to the credit union community. During the event, Matz restated her support for supplemental capital and enhancements to credit union member business lending capabilities.

In discussing the impact of the recent Bank Transfer Day, Matz recognized that credit unions' net worth may be impacted by increased deposits and stated that access to supplemental capital would be beneficial in today's environment. "It makes no sense to have credit unions turn away deposits from consumers who have trust in the institution," said Matz. "Supplemental capital would be a great help to credit unions in that position." Matz told the audience she has met with members of Congress to educate them on supplemental capital; NASCUS continues to encourage support, as well. The Chairman also restated her support for the cap increase for member business lending to 27.5% of assets, as included in pending legislation in the House and Senate.

Matz also briefed the group on the status of the agency's budget. Over the last two years, the NCUA budget included $46 million in increases. Matz defended the budget increases as essential to saving the insurance fund from losses and said that while the 2012 budget is going up, it will be a less significant increase than last year. A pay freeze for NCUA staff was also instituted, she said.

Regarding assessments, she announced that there will be no insurance premium in 2011. For 2012, she expressed hope that there will no assessment but recommends credit unions budget up to seven basis points. The 2012 assessment for the corporate stabilization fund is expected to fall between 8-11 basis points. "We hope to keep the remaining corporate assessments in the single digits going forward," said Matz during the town hall. 

The credit union industry should expect significant changes to the proposed rule on Credit Union Service Organizations (CUSOs), announced Matz. After review of the comment letters, the agency intends to develop a final rule with a more targeted focus on areas of risk such as lending and loan participations. NASCUS recommended NCUA revise the proposed rule to target risk and enhance due diligence at the credit union level in addition to working with state regulators to leverage existing resources.

NCUA informed attendees that a proposed rule regarding loan participations is forthcoming, as well as the final rule on interest rate risk, among others. A recording of the Town Hall will be made available through www.ncua.gov.