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.
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