NCUA Corporate Stabilization Update - Message from the CUNA CFO Council Chair

CUNA CFO Council
February 13, 2009 | COMMENTS

With the passing of the initial shockwave from the January 28th NCUA announcement on Board Approves Corporate Stabilization Efforts and the implications to our credit unions and the movement at large, your executive committee has met to determine how we can best assist you, our members, as you navigate these difficult times and circumstances.

First and foremost, we believe that it is critical to focus on what we can influence and important to channel our energies into constructive actions and results. We also believe that providing educational information to our members is necessary and fulfills one of the primary objectives of our council’s purpose. Given this, we are assembling materials that provide solid reference tools for understanding the corporate network, the accounting implications, and the actions that are in process throughout the movement and at CUNA. While there are still many unknowns, our intent is to aggregate what we know and/or need to know to be effective in responding to the situation. Now available is a link to our CUNA CFO Council website, which provides an aggregated source of information to the corporate stabilization situation, accessible here. Already available is a Financial Flash, "Understanding OTTI," and information regarding the NCUA’s Advanced Notice for Proposed Rulemaking (ANPR) on corporate credit union restructure. As we intend to update our CFO website with materials as they are developed, you may want to periodically refer to www.cunacfocouncil.org to keep current on this situation.

Another initiative your Regulatory Committee and the Executive Committee is working on is 5300 reporting. The intent of this initiative is to influence the NCUA to revise the presentation of public information regarding financial condition and ratio analysis. Specifically, we would like to see the NCUA:

• Revise the presentation of individual credit union financials at www.ncua.gov to provide clear disclosure of CU performance with and without this event to the public.
• Revise the March 2009 Call Report to clearly isolate the impairment and premium expense separately from other expenses by creating a category/account/line item separate from Member Insurance Expense or Operating Fee. This will facilitate the exclusion of the impact of this event when analyzing the performance of credit unions in a peer analysis.

While there are many varying opinions and thoughts on this situation, we know that serving our members is our most important mission; and that we need to maintain the cooperative spirit by working together and having faith in each other that any actions taken for the benefit of our members will benefit our movement as well.

Your Executive Committee thanks you for your support and welcomes any thoughts or contributions you have for constructive forward progress.

Erin Mendez

CUNA CFO Council, Chair