Home > Credit Unions

NCUA's Corporate Credit Union Stabilization Program

The Department has been reviewing the various provisions of the NCUA's Corporate Credit Union Stabilization Program both as an agency and as a participant in NASCUS, the National Association of State Credit Union Supervisors.    We recognize that NCUA, as the regulator of U.S. Central, a federally chartered corporate, had a responsibility to take action when it was determined that Other Than Temporary Impairments (OTTI) were realized in U.S. Central's mortgage backed securities portfolio.   As the regulator of U.S. Central, NCUA had the choice of either taking the action that occurred (recapitalization of the corporate through the deposit insurance fund) or alternatively it could have conserved U.S. Central, in which case the losses in the mortgage backed portfolio would have to be realized and down-streamed through the corporate system and then to the natural person credit unions investing in the corporates.

The Department and NASCUS are continuing to study the actions taken by the NCUA, and the legal statutory authority for the actions taken by NCUA in these matters.  There is an ANPR on the future focus and direction of the corporate system and the Department plans on participating in the response to these issues.    We believe that Georgia Central Credit Union is one of the strongest corporate credit unions in the corporate system, but we are monitoring the condition of other corporate credit unions actively and maintaining a regular dialog with NCUA at the highest levels to determine if additional capitalization is going to be required for the corporate system.

We recognize that the actions taken by the NCUA will impact the deposit insurance fund and that recapitalization of the fund will impact natural person credit unions.   We intend to maintain a measured and appropriate supervisory approach and will be directing our examiners to consider the impact of actions taken by the NCUA that are not within the control of the credit unions, but which could impact the earnings positions of credit unions.   We are fortunate that Georgia credit unions are with very few exceptions extremely well capitalized, but we will be attempting to take a measured approach if the impact of these decisions were to result in a credit union falling below a well-capitalized position.

Included below are various links to the ANPR, the pronouncement of the NCUA on the Corporate Stabilization Plan and a Frequently Asked Questions link established by the NCUA regarding these matters.   These include estimates of the probable adjustments that will be required in 2009 regarding the deposit insurance fund.

George A. Reynolds
Senior Deputy Commissioner
Georgia Department of Banking and Finance

---

The following publications are available from the NCUA’s website:

• Accounting Bulletin No. 09-1, February 2009
• FAQs About the Corporate Stabilization Program 
• NCUA Chairman Michael E. Fryzel Unveils Corporate Stabilization Program 
• Press Release: NCUA Board Approves Corporate Stabilization Efforts
• Letter to Credit Unions
• Fact Sheet: Temporary Corporate Credit Union Liquidity Guarantee Program
• Fact Sheet: Temporary Corporate Credit Union Share Guarantee Program 
• Fact Sheet: Capital Note Terms Notice 
• Advanced Notice Proposed Rule Making (ANPR)