Don’t overlook liquidity risk: New guidance demands thorough risk mitigation strategies
August 30, 2010
Not many CUs would consider liquidity a high concern right now. Many of them are sitting on what they might consider to be too much liquidity and they’re far more worried about anemic loan growth than liquidity risk. Don’t underestimate the gravity of liquidity risk right now, experts...
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Indexed by: Exams/Enforcement | Liquidity | Risk Monitoring
New guidance signals agency concern over indirect lending
August 30, 2010
Some of the biggest recent CU failures stemmed from poorly structured, insufficiently vetted indirect lending programs. The NCUA hasn’t forgotten. The agency will want to know – and want you to know – your indirect lending program inside and out at your next exam. That’s...
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Indexed by: Due Diligence | Indirect Lending | Lending | Management
Liquidated: CUs have few options in the face of a liquidation order
August 23, 2010
Innocent until proven guilty? The right to face your accuser? No and no. As Kappa Alpha Psi FCU found last week, a liquidation decision from the NCUA isn’t anything like a criminal trial. If the NCUA board considers you a prime candidate for liquidation, you won’t know it. The board...
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Indexed by: Exams/Enforcement | Legal | Regulation
ERM is scalable: How one small CU adopted enterprise risk management
August 23, 2010
Smaller CUs can implement successful, sophisticated ERM programs. Consider Southern Florida FCU ($29 million) in Miami. At the suggestion of a board member, the CU embarked on a relatively modest ERM program 18 months ago. The program not only helped the CU manage its loan portfolio in the thick of...
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Indexed by: Exams/Enforcement | Risk Monitoring
Kappa Alpha Psi FCU v. NCUA: A regulatory timeline
August 23, 2010
When challenged over an involuntary liquidation, the NCUA has to prove that the CU in question is not only inadequately capitalized, but also that the CU has “no reasonable prospect of becoming adequately capitalized.” Kappa Alpha Psi challenged its liquidation order in U.S. District...
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Indexed by: Exams/Enforcement | Legal | Regulation
Hot money worry? - CUs with high money market, CD concentrations speak out
August 16, 2010
Share composition has shifted in the last 10 years and the NCUA isn't thrilled about it. NCUA board member Gigi Hyland, speaking this month at the 33rd Annual National Directors' Convention, reiterated the agency's view. Regular credit union shares, across the industry, are up, but as a percentage...
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Indexed by: Earnings | Liquidity | Management
NCUA to regulate golden parachutes
August 16, 2010
Not all departing CU managers in line for "golden parachute" payments will get them. That's according to the NCUA's new proposal to prevent managers at troubled, federally insured CUs from collecting payments as they escape a sinking CU.
The new regulation targets payments earmarked for departing...
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Indexed by: Management | Regulation