Media Advisory

FOR IMMEDIATE RELEASE

Vice Chairman Hood Leads the Call to Preserve Confidence in America’s Credit Union System

October 9, 2008, Alexandria, VA. – National Credit Union Administration (NCUA) Vice Chairman Rodney E. Hood addressed the Credit Union Association of New York’s Annual Meeting in Niagara Falls, N.Y. During this turbulent time in America’s economy, Mr. Hood took this opportunity to send a clear message of trust and confidence in America’s credit union system. Hood reassured the attendees of his dedication and commitment to oversight and regulation of the credit union industry.

Hood opened with a call to credit unions nationwide, acknowledging that while credit unions were not directly involved with the problems created by our country’s mortgage debacle, they can and should be part of the solution.

“With the current economic climate in America, the challenges in today’s financial marketplace are unprecedented…I am calling on credit unions to be a part of the solution. Being part of the solution requires confidence from your member owners, your management teams, and from your boards. With confidence in the financial health, transparency, and integrity of the credit union system, we can all move forward in helping credit unions remain viable and sustainable so that they can be there when their member owners need them,” said the Vice Chairman.

Mr. Hood went on to note strategic steps NCUA is taking to preserve confidence in America’s credit union system:

• Advertising campaign on Federal Insurance
• Credit Union Inclusion in Emergency Economic Stabilization Act
• Attention to proactive risk management through a new Risk Focused Exam

The National Credit Union Administration 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. NCUA is funded by credit unions, not federal tax dollars.

President George Bush recently signed into law the “Emergency Economic Stabilization Act”, which temporarily increases federal deposit insurance coverage. The law provides for an increase in the minimum NCUSIF coverage from $100,000 to $250,000 through December 31, 2009 on new member share accounts. NCUA has recently launched an advertising campaign featuring Uncle Sam in the national news media to inform member owners that their funds are safe. “In the midst of financial market turbulence, it is imperative that credit union member owners know that their share accounts are federally insured ad backed by the full faith and credit of the United States Government,” said Hood. To further build confidence, NCUA has established a call center devoted to fielding questions about share insurance.

The passage of the Emergency Economic Stabilization Act of 2008 also removes the Central Liquidity Facility (CLF) borrowing cap. In addition, the Act allows NCUA to act in a consultative role with other regulators in determining how the Troubled Asset Purchasing Program (TARP) will work. Mr. Hood assured the audience that “This will enable NCUA to have input on the rules under which assets are accepted by the federal government - greatly assisting NCUA in mitigating some of the current and potential difficulties facing the credit union industry.”

Vice Chairman Hood has been a leading advocate of Enterprise Risk management. “I believe that a successful Enterprise Risk Management (ERM) process can build confidence in the credit union system . . . it can help proactively address the myriad of challenges in the financial services industry.” To that end, NCUA has eliminated the camel matrix and has developed a new exam which focuses on 7 areas of risk (credit, interest rate, liquidity, strategic, transaction, compliance, and reputation). “The overall goal of the Risk Focused Exam is not to play ‘gotcha’; but rather, it is designed to be a collaborative and consultative process,” said Hood.

In closing, Mr. Hood reiterated the importance of having faith and confidence in the credit union industry. “We need everyone to work toward a safe and common goal of creating a safe and secure financial industry for the entire Nation. The challenges ahead are many, but so too are the opportunities for you to demonstrate the credit union philosophy of People Helping People.”

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.

-NCUA-