The most important event of the year for credit unions

WASHINGTON, DC (August 25, 2017) — Rarely do urgency and importance combine in one event, but NCUA’s proposal to combine the TCCUSF with the NCUSIF as of Oct. 1, 2017, is one such case.

For the past eight years, the NCUA has acted unilaterally in its oversight and financing decisions involving corporate credit unions, the corporate stabilization plan, and the use of NCUSIF money and setting reserves. The NCUA did not ask for credit union input on the stabilization plan requiring the liquidation of five corporates and almost $100 billion; on the legislation to set up the TCCUSF; on the four premiums assessed to fund the NCUSIF and the TCCUSF; on the effective dismantlement of the Central Liquidity Facility (CLF) safety net; or on the reasonableness of its annual budget. All these events took members’ funds.

NCUA has been telling credit unions since the NCUA Guaranteed Notes program in 2010 that they could not expect recoveries from the corporate stabilization plan to be available until at least 2021.

In requesting comments on the proposal to merge the TCCUSF and NCUSIF, NCUA board members Mark McWatters and Rick Metsger have turned past practice on its head. They have asked the owners of the NCUSIF to act as owners. What do credit unions think of the NCUA staff’s proposal?

The NCUA staff estimates this action will result in a transfer of $2.2 to $2.4 billion of TCCUSF recoveries to the NCUSIF and become available for distribution as a special dividend in 2018. What should be done with these funds? Can this early windup of the TCCUSF be an opportunity for credit unions and the NCUA board to write a new chapter in their relationship?

To accomplish this, credit unions must act like owners by speaking up for what they believe to be in the best interest of their members. That is the fiduciary role of both the NCUA board and credit union leaders.

Although the NCUA staff presented a great deal of data, the issues and the numbers are relatively simple to understand. These will be summarized in a webinar hosted by Callahan & Associates chair Chip Filson on Tuesday, Aug. 29 at 2:00 p.m.

What is most important, however, is for the owners to comment and to give the NCUA board the reasons why returning the money to the members is the wisest and most appropriate action to take. Without such input, the mindset and unilateral habits of the NCUA’s activity in the past eight years could be rolled up into a much larger fund.

This early closure involves more than money. It is about re-visioning NCUA’s relationship with the industry and its stewardship of members’ funds.

To sign up for the webinar and to receive a full analysis, please click here.

About Callahan & Associates

For more than 35 years, Callahan & Associates has helped credit union leaders identify strategic growth opportunities that increase member value. We create meaningful dialogue, connect people, provide counsel, and help organizations thrive through our competitive analytics, best-practice media, leadership consulting, and collaborative ventures. Our clients grow assets, members, shares, and loans faster than industry averages. Learn more at


Victoria Taylor

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