In a recent comment letter to NCUA, New York Credit Union Association President/CEO William J. Mellin commended the agency’s plans to fold the Temporary Corporate Stabilization Fund into the Share Insurance Fund. However, Mellin expressed concerns with certain aspects of the agency’s approach.
“Returning the excess funds to credit unions would strengthen their capital positions and foster opportunities for growth,” wrote Mellin. “But most importantly, it would return the money to its rightful owners: the credit union members who put their trust in their local credit unions.”
Most notably, Mellin urged NCUA to reconsider its plan to raise the Share Insurance Fund normal operating level from 1.3 percent to 1.39 percent, calling it “highly excessive” and explaining that “such an increase is not necessary to preserve the health of the Share Insurance Fund.”
Increasing the normal operating level would result in credit unions and their members receiving far less money than they are entitled to, he explained.
Mellin did say New York’s credit unions would be understanding of some type of increase in the normal operating level, assuming NCUA provided comprehensive analysis that demonstrated the need for such an increase.
Mellin concluded: “It is now time to close the Stabilization Fund and distribute excess equity payments back to credit unions so that the money can be restored to its rightful owners: the more than five million credit union members in New York and 110 million credit union members nationwide.”
To view the complete comment letter, visit the Association’s website.