Friday, December 10, 2010 12:04:02 PM
On Thursday, NCUA Chairman Debbie Matz answered questions posed by the Senate Committee on Banking, Housing, and Urban Affairs (Committee). Matz, in her opening statement, testified that NCUA has reformed and strengthened the corporate credit union system and enabled credit unions to continue serving consumers despite difficult economic times.
NCUA Chairman Matz (right) speaking with Sen. Tim Johnson (D-S.D.) (left) before the Senate hearing. (Photo courtesy of NCUA)
"NCUA's increased supervision has contributed significantly to the credit union system's ability to withstand the extraordinary economic shocks over the past two years," according to Chairman Matz. The NCUA Chair pointed out the strength of the equity in the National Credit Union Share Insurance Fund (NCUSIF) by stating that NCUSIF is now up to 1.29%, "near the high end of its normal operating range." Matz also noted that the corporate credit union losses, expected to total $15 billion, are being paid for entirely by credit unions. Credit unions have already paid in approximately $7 billion to date.
The Committee was particularly interested in the five failed corporate credit unions that served more than half the credit union system, setting investment concentration limits, and whether NCUA will be conducting its own due diligence of corporate credit union securities in light of the failure of the previous ratings systems of investments and its ultimate unreliability.
Matz also cited in her testimony a package of technical NCUA amendments currently pending - but due out in first or second quarter 2011 - that are enhancements to the Federal Credit Union Act as intention of steps to improve the operations of the NCUSIF.
Chairman Matz's full testimony is available at http://www.ncua.gov/GenInfo/Members/Matz/speeches/MatzStateOfIndustryDec2010-Final.pdf.
An archived video of the Webcast of the hearing is available at http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=aaf46fac-b6e4-4d61-8d1c-06355e8ba0eb.