Compliance Blog

Wow.  I have to stop traveling.  I head out to SF for the week, and the compliance hits just KEEP ON COMING.  Here's the latest:

NCUA to Establish Corporate CU Loan Guarantee Program.  Here's some NCUA comments:

Effective October 16, 2008, the National Credit Union Share Insurance Fund (NCUSIF) is providing federally insured corporate credit unions with a 100 percent guarantee on new unsecured debt obligations, subject to terms detailed in the program.  

The NCUSIF guarantee applies to new unsecured debt obligations issued by eligible corporate credit unions on or before June 30, 2009, and maturing on or before June 30, 2012. This includes promissory notes, commercial paper, inter-bank funding, and any unsecured portion of secured debt.

The amount of debt obligations covered by the guarantee per eligible corporate credit union may not exceed the greater of:
   (a) 100 percent of the eligible corporate credit union’s maximum unsecured debt obligations outstanding during the period September 30, 2007 through September 30, 2008;
   (b) an amount determined by written approval of the director, Office of Corporate Credit Unions, with the prior concurrence of the director, Office of Examination and Insurance, not to exceed $100 million; or
   (c) an amount determined by the NCUA Board.

All corporate credit unions are automatically covered for debt obligations issued through November 17, 2008. Corporate credit unions may elect to opt out of the program by providing notice to the Office of Corporate Credit Unions.

The NCUSIF will charge participating corporate credit unions a fee of 75 basis points per year on the outstanding balance of guaranteed debt obligations. The program is similar to the “Temporary Liquidity Guarantee Program” announced by the Federal Deposit Insurance Corporation October 14, 2008, and is intended to provide corporate credit unions with competitive standing in the debt market.

"While this new Board action is directed at addressing corporate liquidity issues, I think it is important that natural person credit unions be fully aware of all of their options in this
very tight and difficult liquidity situation, including the Central Liquidity Facility,” said NCUA Chairman Michael F. Fryzel. â€œThe standards for CLF borrowing are stringent, and our evaluation of requests will be thorough, but credit unions should know that their short-term liquidity needs can be addressed through CLF borrowings. I encourage all appropriate use of the CLF as another means to maintain liquidity and confidence in the credit union system during these uncertain times."

As usual, stay tuned.

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I can't say enough about the compliance officers who attended this year's compliance seminar.  They are a dedicated, yet fun-loving bunch, who sit through detailed programs in order to learn the latest compliance-related news.   I'm lucky to work with them, and I am lucky to call them friends. 

With that in mind, have a great weekend, everyone.  (Except those pesky Wolverines.)