Alloya's Capital Push and Latest NCUA Regulatory Update Highlight Yesterday's League Session

Tuesday, August 02, 2011 11:08:00 AM

Originally scheduled as a special luncheon with New Jersey Congressman Jon Runyan, yesterday's luncheon was transformed into a "Credit Union Issues" session where the latest from Alloya Corporate and NCUA were the hot topics.

Over 35 credit union professionals gathered for yesterday's "Credit Union Issues" luncheon.


Alloya's Victor Vrigian and Jackie Carlson updated attendees on Alloya's business plan and capital push. Currently, 617 CUs have subscribed with $48.3 million in capital, 69% of the $70 million needed. Vrigian noted, however, that many CUs have verbally committed, and it's a matter of having the board meeting to sign-off on the recapitalization. Vrigian said based on those numbers, Alloya is expected to get to the necessary capital level.

There are incentives to capitalizing by Aug. 31. Credit unions that do so will get a line of credit up to 30 times their capital. After Aug. 31, that drops down to 20 times capital. Credit unions that do not recapitalize will see their line reduced to cover settlement. Vrigian also noted that CUs that recapitalize will not see large across the board increases in fees as it's not part of the business plan, but CUs that haven't capitalized by Dec. 1 will see a 25% increase for fee-based services, other than services from Alloya's broker/dealer/investment advisory CUSO, BalanceSheet Solutions.

Vrigian stressed that the business model of Alloya is not as dependent on investments prior to NCUA's revised corporate credit union regulation.

Carlson highlighted some of Alloya's new product plans, including a full suite of deposit capture solutions to its membership. The offerings will include ATM, teller, mobile, consumer, and merchant capture products that credit unions can use to improve their efficiency and attract and retain members.

The Alloya Corporate Board will meet on Aug. 29th to determine whether or not to push forward with the new charter and formally request NCUA to consider the new charter application.

The day also featured a regulatory update from NJCUL Director of Compliance Nicola Foggie. Foggie covered the latest regulatory developments, including the status of NCUA's Voluntary Corporate Assessment Prepayment Plan, recent NCUA budget cuts, the launch of the Consumer Financial Protection Bureau, a new proposed NCUA CUSO rule, and more. Credit unions who were not in attendance can request Foggie's presentation by emailing her at nfoggie@njcul.org.

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