Board Member Hyland Informs Volunteers of Corporate Stabilization Efforts
Alexandria, Va., April 1, 2009 – National Credit Union Administration (NCUA) Board Member Gigi Hyland spoke with 60 credit union volunteers attending the CUNA Roundtable for Board Leadership in Henderson, Nev., March 30, 2009, and she urged them to communicate with their colleagues about issues pertaining to NCUA’s Corporate Stabilization Plan. Hyland acknowledged that “while I urge credit unions to be transparent to their members, I expect the NCUA to also be as transparent as possible. That is why I am here—to tell you as much as I can about what the agency is doing and to answer your many legitimate questions about these actions.”
Many attendee questions focused on having greater detail about the agency’s independent analysis of credit losses at corporate credit unions and the rationale for placing WesCorp and U.S. Central FCU into conservatorship. Specifically, attendees inquired when and how much of the independent analysis conducted by PIMCO the agency would share. Hyland explained how NCUA analysis and the PIMCO evaluation were used by NCUA in affirming additional corporate stabilization actions. She urged the volunteers to read the conservatorship and PIMCO FAQs on NCUA’s website and indicated that she expected a summary of the PIMCO report should be available to the public within the next week or two.
After answering their questions for nearly 90 minutes, Hyland told the audience that her appearance was part of a deal with them. “Now that I have answered your questions, I expect each of you to go back to your credit unions and tell your colleagues what you heard today. Let them know that the actions taken by NCUA were not hasty – they were well thought-out, that many other options were considered before taking action, and that the actions taken have been driven by the intent to find the least costly solution to credit unions. Tell your colleagues that NCUA continues to be committed to exploring all viable alternatives, including the recently adopted legislative proposal to spread the costs over 7 years to mitigate the costs to credit unions.”
Finally, Hyland indicated that while neither NCUA nor the credit union system had any control over the economy, that credit unions do have the ability to contribute to the outcome of NCUA’s actions. “I strongly urge you to do two things. First and foremost, keep liquidity, your deposits, in your corporate credit union, especially WesCorp. Withdrawals will weaken the system’s liquidity position and may force NCUA to prematurely sell the bonds, causing much greater losses than we have already seen. Our golden rule of stabilizing the corporate system has been to hold the bonds to maturity in order to avoid selling them in this illiquid market. Second, continue using your grassroots efforts in favor of NCUA’s legislative proposal to allow credit unions up to 7 years to pay the cost of assessments.”
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The National Credit Union Administration is the independent federal agency that regulates, charters and supervises federal credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, also operates and manages the National Credit Union Share Insurance Fund (NCUSIF), insuring the deposits of over 89 million account holders in all federal credit unions and the majority of state-chartered credit unions.
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