NCUA Board gets TCCUSF report, OKs joint agency appraisal rule
March 21, 2014 – The Temporary Corporate Credit Union Stabilization Fund improved its net position in 2013, moving from a deficit of $3.5 billion to a deficit of $142.2 million during the year, agency staff reported during Thursday's open NCUA Board meeting.
NCUA Chief Financial Officer Mary Ann Woodson said the nearly $3.4 billion improvement was due to an increase in anticipated future cash flows from the NCUA Guaranteed Notes program and settlements with JPMorgan Chase and Bank of America, which NCUA sued over their sales of faulty mortgage-backed securities to several now-defunct corporate credit unions.
“Effectively managing the stabilization fund to minimize federally insured credit union assessments is a top NCUA priority,” NCUA Board Chairman Debbie Matz said.
The two settlements plus improvements related to the NGN program “led to a sizable improvement in the stabilization fund’s net position in 2013,” she said. “I’m hopeful we can forgo charging assessments not only in 2014, but in future years as well.”
Matz reiterated there is no plan for a stabilization assessment for 2014. The stabilization fund had $2.9 billion in outstanding borrowings with the U.S. Treasury on Dec. 31, 2013, a decrease of $2.2 billion for the year.
The fund received its fifth straight clean audit opinion for 2013. NAFCU welcomed that report but continues to urge transparency on the fund’s expenses.
Matz reiterates desire for third-party vendor oversight
The board on Thursday also approved a proposed joint agency rule on minimum requirements for appraisal management companies that has no direct impact on credit unions, but the agency’s chairman said it leaves a “regulatory blind spot.”
NCUA is required by the Dodd-Frank Act to approve this rule, but Matz noted that NCUA has no direct authority of its own to examine and supervise third-party vendors serving credit unions. She said NCUA will keep asking Congress to provide such authority.
“NCUA does not have the authority to examine third parties, and we continue to oppose such authority,” said Mike Coleman, NAFCU’s director of regulatory affairs. “Credit unions perform extensive third-party due diligence, which is already a focus of NCUA examinations and is conducted in accordance with NCUA guidance.”