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NCUA TREATMENT OF CREDIT UNION PIC/MCS IN CORPORATES - RESOURCES

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Fellow Council members,

If you participated in NCUA's Town Hall Web Event on Thursday October 22, 2009, you might recall reference to a special NCUA meeting scheduled for November 5, 2009 at the NCUA headquarters in Alexandria, Va. During her speech to Association of Corporate Credit Unions (ACCU) members, Matz recognized that “many of you believe that there should be some mechanism within the corporate structure to allow contributed capital accounts to be replenished if losses don't fully materialize as projected. I've gotten the message loud and clear that this is a concern. So I have asked senior NCUA staff to participate with corporates in a special meeting on this issue.”

A participant in the web event asked if natural person credit unions would be invited to the meeting or if it was for corporate credit unions (CCUs) only. Chairman Matz indicated that it was open to natural person credit unions (NPCUs) who are interested in attending.

In that the meeting was opened to all credit unions, the CUNA CFO Council Legislative and Regulatory Committee has developed the following resource page to use in providing documents to assist you in preparation for that meeting.

Reports indicate the meeting provided good constructive dialogue from many sides of the issue.  NCUA Chairman Matz voiced her intent to “immediately begin an analysis of the information received, take a fresh look at the capital depletion issue and its component parts, and make certain that NCUA is proceeding in a way that satisfies all legal, policy and accounting requirements. I am committed to ensuring that this review occurs in an expedited manner that will enable all stakeholders to move forward with full transparency of corporates' financial statements and full confidence in the stability of the credit union industry.” 

The resource page will remain active for our membership until the issues are finalized.

In reading through the documents provided and formulating your opinion of the matter, remember that accounting rules will still require some form of impairment even if CCUs were allowed to operate with negative undivided earnings. However the size of the impairment may or may not be to the extent that the NCUA currently requires under depletion/extinguishment. Therefore credit unions may have an initial write down that is less and will be permitted to record any future impairments as they are incurred.

Thank you for your attention to this issue.

- CUNA CFO Council Legislative and Regulatory Committee

Note:  Permission was obtained from the authors before posting any CU-specific information on this site.

NCUA RESOURCES

Matz Statement Following November 5th Meeting (11/5)

Media Release re: November 5th Meeting (10/16)

NCUA Rules and Regulations Part 704 - Corporate Credit Unions

Link to NCUA Letter to Credit Unions 09-CU-10

LETTERS TO NCUA

CUNA Letter (November 4, 2009)

CUNA Letter (May 14, 2009)

SunCorp Letter (September 30, 2009)

Constitution Corporate Letter (October 8, 2009)

Southeast Corporate Letter (October 13, 2009)

Louisiana Corporate Letter (October 13, 2009)

Freedom Credit Union Letter to NCUA Board

St. Vrain Valley Credit Union Letter to NCUA Board

LETTERS FROM CORPORATE CUS TO MEMBERS

SunCorp Letter (October 23, 2009)

SunCorp Letter (October 28, 2009)

TALKING POINTS / DISCUSSION ITEMS

Talking Points from SunCorp Credit Union

Discussion Framework - NCUA Meeting November 5, 2009 from the Association of Corporation Credit Unions

Talking Points from the Association of Corporation Credit Unions

ACOUNTING RESOURCES

CPA Opinion Document – Michael J. Sacher, CPA

CPA Opinion Document – Rebowe & Company

AICPA Technical Practice Aid: Evaluation of Capital Investments in Corporate Credit Unions for Other-Than-Temporary Impairment, AU Section 6995.02

Statement of Financial Accounting Standards No. 140

FASB Statement of Financial Accounting Standards No. 115

Proposed FASB Staff Position on Statement 115, Statement 124, and EITF Issue 99-20

FASB Staff Position (FSP) Nos. FAS 115-1 and FAS 124-1: The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments

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