On-Site Coverage of NCUA Town Hall – Boston

By: Theresa A. Hilinski – Vice President – Philadelphia Chapter of Credit Unions

While attending CUNA’s Community Credit Union and Growth Conference this past week in Boston, I decided to take a short walk down to the Boston Park Plaza Hotel where the NCUA Town Hall meeting was being held.  Being someone who is not particularly active in politics, I wasn’t all too familiar with what to really expect from a ‘Town Hall’ meeting.  Joining me was a fellow conference attendee, Bo McDonald, Your Marketing Co; we grabbed a seat closest to the door (just in case we needed an early escape!) and started checking out the room while we prepared the Twitter universe of our whereabouts, and more importantly our forthcoming timely updates.

Gigi Hyland started the meeting with a welcome to all the attendees and a thank you for coming to listen and participate.  As she continued on, she made sure to emphasize on the fact that the Corporate System Resolution was not in anyway a bailout and not putting taxpayers on the hook.  NCUA’s intended actions of 1. Stabilization, 2. Resolution and 3. Reform were then reviewed in detail.

While it could be simply described as what’s being done to stop the bleeding, heal the wound and ensure it doesn’t happen again, here are more helpful points discussed from those areas:

• Stabilization: Attempts being made here are to continue with the payment systems and various services offered by the corporates without causing massive interruptions to natural person credit unions.
• Resolution: As a part of this step in the process, the initial conservatorships have been setup for the corporates in trouble.  There is a plan for the bridge corporates established to have an estimated  timeframe of roughly 24 months (allowing natural person credit unions to take some time to review their next steps).  Lastly, the funding and assessments are addressed.  It’s estimated that a heavier assessment will fall in 2010 and 2011 (because of cash flow needs), however amounts have yet to be confirmed for these years through 2021.
• Reform: Lastly the NCUA is re-evaluating the corporate credit union rule, which also includes upcoming meetings with all corporate credit unions in the very near future.

With most credit unions still trying to swallow the assessments from the recent past, it was a hot topic of conversation between attendees and speakers for some time.  Offering lower assessments for smaller credit unions was ruled out due to the non-practical  (or subjective) nature; while assessments for already somewhat (capital) troubled credit unions could not be weighed differently since it’s felt those institutions were already at a bad camel rating.

While plenty of questions related to assessments were addressed, the most interesting to me was an attendee who bravely asked the reasoning for not seeking government assistance.  While some news outlets are already referring to our situation as a bailout, what is the reasoning to assess credit unions again.  As Gigi Hyland detailed our recent history of legislative fights related to our tax exempt status (and the desire to avoid these in the future), she also simply summarized it by stating that we have an in system solution.  Keeping to her promise (of seeking an open dialog) from the beginning of the session, Board Member Hyland continued to answer questions not necessarily related to the recent events.  All in all, the session was presented in both a simple and informative manner; I think despite it only being the second Town Hall meeting held so far, they were off to a good start in keeping credit unions informed.

Theresa A. Hilinski is Vice President of the Philadelphia Chapter of Credit Unions and also holds a CUDE and DEUK designation.