Corporate Credit Unions Update
February 18, 2011
To: Credit Unions Supervised by the New York State Banking Department
Re: Corporate Credit Unions Update
Please refer to our industry letter dated October 28, 2010 in which we provided background information on the Corporate Credit Union situation. The Credit Union Association of New York (CUANY) established a task force to review the situation and make recommendations to the Association. The Credit Union Association of New York has issued a press release on their web site summarizing the task force’s recommendations. The task force recommended “that New York's credit unions support a reconstituted charter for Members United Bridge Corporate FCU” and further recommended “endorsement of the Members United ‘Forward Together’ plan as the business model for the reconstituted corporate.”
In September 2010 the National Credit Union Association (NCUA) finalized major revisions to Part 704 which governs corporate credit unions. The final rule “establishes a new capital structure, including risk-based capital requirements, to provide corporates with a stronger capital base. It establishes prompt corrective action (PCA) requirements for corporates so that NCUA has the tools it needs to deal with undercapitalized corporates going forward.”
We encourage you to carefully review these documents when assessing the best way forward for your credit union.
The web addresses for CUANY and NCUA are as follows:
Please contact Marcel Baruth at (212) 709-1578 or Richard Cordner at (212) 709-1529 should you have further questions.
Very truly yours,
Martin D. Cofsky
Deputy Superintendent of Banks
Community and Regional Banks Division