WHAT’S IN A NUMBER (FROM PAGE 4)
As a result of NCUA’s actions, directors are
more aware of their fiduciary responsibilities,
the need for them to be diligent and the
importance of continued education and courses.
Especially in an industry that is ever changing.
That, is a good thing.
The article also mentioned “a” credit union that
had experienced a problem between their state
regulator and NCUA. These things do occur.
Everyone, even regulators, do not always agree.
And depending upon the circumstance, some
disagreements lead to better overall operations or
outcomes. However, the article implied that these
disagreements were widespread occurrences,
which I believe they are not.
So how should one react? Should there be
concern that “some” directors are opposed to
being told they need continued education or “a”
credit union experienced a problem between
regulators? Should the education regulation be
repealed and a new one added to handle
regulation problems? Or should everything just
be left alone since “most” directors like
continuing education and “most” credit unions
are satisfied with their regulators?
Six of one, a half a dozen of the other. It’s all in
REGION II REPORT (FROM PAGE 6)
will be reviewing IRR policies and working with
management at affected credit unions to ensure
reasonable systems are in place to identify,
measure, monitor, and control interest rate risk.
The good news is rates are expected to remain
low in the short-term, thus providing a window
for credit unions to unwind unfavorable
positions or implement tactical changes to hedge
existing risk. The Federal Reserve anticipates this
low-rate window will last 24 to 36 months,4 but
the effect of external market forces on rate
forecasts is an unknown variable. Managing and
in some cases reducing risk now is the surest path
to stability when, not if, interest rates begin to
rise in the future.
4 Board of Governors of the Federal Reserve System:
Press Release, March 13, 2012. Retrieved from
20120313a.htm on April 6, 2012.
LOW-INCOME CREDIT UNIONS CAN ACCESS NEW MONEY
(FROM PAGE 1)
; New Product and Service Development
; Staff, Official, and Board Member Training
; Student and Job Creation Internships
; Volunteer Income Tax Assistance
Through the Urgent Needs Initiative, LICUs may also apply year-round for grants up to $7,500 to cover expenses related to natural
disasters and other unexpected adverse events.
Loan Application Process Streamlined, Made Easier
Late last year, the NCUA Board improved how the CDRLF works
by adopting a final rule to overhaul the program (Part 705).
“The streamlined rule does not change the fundamental mission of
the CDRLF to help low-income credit unions,” said Chairman
Matz. “Rather, the new rule enhances credit union access to funds
by increasing program flexibility and transparency, eliminating
outdated procedures, and improving the organization and structure
of the rule to make it more user-friendly.”
In addition to potentially larger loan amounts and much lower
interest rates, specific examples of the beneficial changes to CDRLF
loans for 2012 include:
; Application simplified: no community needs plan required;
; No mandatory matching requirement;
; New option to fund credit unions’ urgent needs; and
; Flexible repayment of loan principal.
LICUs may use CDRLF loans for projects like expanding share draft
or credit card programs, or creating partnerships with community-based service organizations and government agencies. Additional
projects may also include acquisition, expansion, or improvement of
office space or equipment, including branch facilities, ATMs, and
electronic banking facilities. LICUs may also use CDRLF loans to
initiate or expand micro-business, education, real estate loan programs,
as well as offer consumer-friendly alternatives to payday loans.
A Successful Initiative Continues
Congress established and funds the CDRLF to support credit unions
that serve low-income communities. NCUA has administered the
CDRLF since 1987. Since then, the CDRLF has made loans totaling
$52 million. Lending and relending CDRLF monies have effectively
quadrupled the impact of the $13.4 million provided by Congress. Since
2001, Congress has also appropriated $9.1 million for CDRLF grants.
In sum, the CDRLF is a successful initiative between NCUA and
LICUs created and funded by Congress. NCUA intends to build on
that success and strengthen the initiative in the future.
For some examples of CDRLF success stories, see story on page 8.
For more information about the CDRLF and links to applying for a
grant or a loan, go to http://www.ncua.gov/Resources/CUs/Dev/