Blinder: Does NCUA and the Federal Reserve Have Same Insight into Systemic Financial Risk?

In an op-ed in the Wall Street Journal, Alan Blinder, a professor of economics and public affairs at Princeton University and a former vice chairman of the Federal Reserve, discusses flaws in the structure of the Financial Stability Oversight Council (FSOC).

The Dodd-Frank Act created FSOC. FSOC is a 10-member panel consisting mainly of the heads of the nation’s top financial regulatory agencies.

However, Blinder questions the design of FSOC.

For example, Blinder wrote:

"[Y]ou might question the FSOC’s voting structure: every agency gets one vote. So it gives equal weight to the chairmen of the Fed and the National Credit Union Administration. Do you think they have equal insight into systemic financial risk?"

Read the op-ed (subscription required).

McWatters to CFPB: Provide Reg Relief to CUs

In a May 24th letter to Consumer Financial Protection Bureau (CFPB) Director Cordray, Acting National Credit Union Administration (NCUA) Chairman McWatters requested that the CFPB provide regulatory relief to credit unions.

Specifically, McWatters asked that the CFPB alleviate the compliance burden for credit unions with respect to the Home Mortgage Disclosure Act and Unfair, Deceptive, or Abusive Acts or Practices requirements of the Dodd-Frank Act.

McWatters noted that Section 1022(b)(3)(A) of the Dodd-Frank Act permits the CFPB to "exempt any class of persons, service providers, or consumer financial services from certain regulations." However, this section of the Dodd-Frank Act has been underutilized by the CFPB.

McWatters points out that the unique structure and small size of many credit unions warrants this regulatory relief. The median size for credit unions is less than $30 million in assets and the median staff size is a mere 8 employees.

The letter is below.

CFPB Seeks Information on the Small Business Lending Market

The Consumer Financial Protection Bureau (CFPB) has issued a request for information on various aspects of the market for small business loans.

Section 1071 of the Dodd-Frank Act calls for the CFPB to collect data on women-owned, minority-owned and small businesses to help identify needs and opportunities in the small business lending market and to facilitate enforcement of fair lending laws.

The CFPB is seeking information in five broad categories: the definition of a small business; what data points the bureau should require to be collected; what lenders should be encompassed by the data collection; what kinds of financial products and credit are offered to small businesses; and privacy concerns related to the data collection. Comments are due 60 days after the filing is published in the Federal Register.

The CFPB also released a preliminary report providing the agency's perspective on the market for lending to small, minority-owned and woman-owned firms and gaps in its understanding of the small business lending market.

The report discussed the role of credit unions, along with other lenders, in financing small businesses. For example, the report cites a Federal Reserve Survey that found "11 percent of all surveyed employer firms and 13 percent of non-employer firms applied for financing at a credit union" with 46 percent of employer businesses and 33 percent of non-employer businesses being approved for credit.

Read the request or information.

Read the CFPB report.

Rep. Luetkemeyer Reintroduces CLEARR Act

Rep. Blaine Luetkemeyer (R-Mo.) on April 26 re-introduced the CLEARR Act (H.R. 2133), which would provide relief from certain rules and regulations for community banks and credit unions.

In reintroducing the bill Rep. Luetkemeyer stated: "The pendulum has swung too far, and it’s time to return to a common-sense, responsible approach to financial regulation that protects consumers from harm without jeopardizing access to the financial products they need to grow their businesses, invest in their communities, and provide for their families."

The bill would limit the authority of the Consumer Financial Protection Bureau (CFPB) by raising the asset size threshold for CFPB supervision from $10 billion to $50 billion. The bill also removes the term “abusive” from the CFPB’s “unfair, deceptive or abusive” acts or practices authority.

Additionally, it would provide relief in the mortgage lending area by exempting community financial institutions from certain escrow requirements and providing a Qualified Mortgage safe harbor for loans held in portfolio.

Furthermore, H.R. 2133 would repeal the Dodd-Frank Act provision amending the Equal Credit Opportunity Act to require collection of small business and minority-owned business loan data.

The bill would curtail "Operation Choke Point" by prohibiting federal banking agencies from requiring depository institutions to terminate a
specific account or group of accounts unless the agency has a material reason not based solely on reputational risk.

Rep. Luetkemeyer introduced similar legislation in the 113th and 114th Congresses.

Dearth of De Novo CUs

On March 21, the House Financial Services Committee held a hearing on the dearth of de novo charters.

Between 2000 and 2016 there were 93 new credit unions chartered. Pre-Dodd Frank Act, the number of new charters average 7.7 credit unions per year. After Dodd Frank the number of new charters averaged only 2.3 credit unions per year.

According to the testimony of Keith Stone, President and CEO of The Finest Federal Credit Union, starting a new credit union is an altruistic endeavor. He pointed out that the initial capital infusion and cash outlays are often too great for many communities and associations, thereby hindering the formation of new credit unions. He also blamed the rising cost of compliance for deterring many potential credit union start ups.

But National Credit Union Administration (NCUA) should also be held accountable for the dearth of new credit unions charters.

The Senate Report on the Credit Union Membership Access Act of 1998 encouraged the formation of new credit unions. The Senate Report stated:

The NCUA Board ("Board") shall encourage the formation of a separately chartered credit union instead of approving an additional group within the field of membership of an existing multiple common-bond or single common-bond credit union.

However, the Senate Report provided an exception to a multiple common-bond credit union to add a group with 3,000 or more potential members, if NCUA determines the group is unlikely to succeed as a new credit union.

But it appears that this exception has become the norm. For example, NCUA in 2016 approved adding 89 groups with 3,000 or more potential members to an existing multiple common-bond credit union, while only one credit union was chartered.

The following table shows the trend between the number of new charters compared to the number of groups with 3,000 plus potential members from 2008 through 2016.

In fact, NCUA now believes that a new credit union with fewer than 5,000 potential members is not viable.

It is likely that the drought of new charters will continue without a change in direction at NCUA.

Short-Handed NCUA Board Will Likely Delay Incentive Pay Rule Until the Next Administration

Bloomberg is reporting that the Dodd-Frank Act incentive compensation rule is unlikely to be completed during the closing days of the Obama presidency due to the National Credit Union Administration (NCUA) Board being short-handed.

The article states that the opposition of NCUA Board member McWatters along with a bureaucratic quirk at the Securities and Exchange Commission (SEC) means the rule will likely be delayed until the next administration.

The Dood-Frank Act required six regulator agencies to engage in a joint rulemaking regarding incentive pay packages.

The article notes that many of these regulators are short-handed. This is particularly the problem at the NCUA, which has "one Democrat and one Republican on what’s normally a three-member board."

According to the article,

"The NCUA’s Republican, J. Mark McWatters, used to work for House Financial Services Committee Chairman Jeb Hensarling, a vocal critic of Dodd-Frank who has warned regulators not to move ahead with any more rules before Trump takes office. Though McWatters reluctantly voted in April to solicit public comments on bonus restrictions, he said at the time that people shouldn’t mistake that for support. NCUA officials have told staff members of other agencies that the credit union regulator won’t take action on the rules before Trump becomes president, said one of the people, who like others asked not to be named because the discussions were private."

Also at the SEC, the agency is down from five members to three. Were the SEC to schedule a final vote and the sole Republican Commissioner did not participate, the agency would lack a quorum to officially approve the new regulation.

Until vacancies at these agencies are filled, a vote to finalize the rule is unlikely to happen.

Read the story.

Democratic Lawmakers Call for Strengthening the Proposed Clawback Rule

Congresswoman Maxine Waters (D-CA), Ranking Member of the House Committee on Financial Services, and 10 Committee Democrats urged financial regulators to strengthen a proposed “clawback” rule regarding when a financial institution must revoke senior executives’ bonuses.

In a letter to the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, National Credit Union Administration, Federal Housing Finance Agency, and Securities and Exchange Commission, Democratic lawmakers expressed concerns with the “excessive level of discretion” granted to firms in executing clawbacks for misconduct, fraud, or misrepresentation in the proposed rule.

"We do not believe that strong public policy goals are served by giving large banks and other financial institutions the choice as to whether to clawback executive bonuses in the face of widespread misconduct."

Th letter states that there is a reluctance in the board of directors to punish senior management and advocates that the agencies provide "less optionality to covered institutions when it comes to holding senior executives accountable."

Read the letter.

Bank and CU Trade Associations Urge Repeal of Durbin Amendment

Trade associations representing nearly every bank and credit union in the U.S. wrote to members of the House Financial Services Committee on Monday expressing their strong support for a provision in the Financial Choice Act that would repeal the Durbin Amendment. Section 335 of the bill would roll back the controversial amendment, which the associations said has led to the erosion of fee-free banking services, increased costs for banks to deliver products and services to their customers and increased the number of unbanked consumers.

“The Durbin Amendment was tacked onto the Dodd-Frank Act at the last minute… without any hearings or analysis, and was sold on the promise of delivering lower prices to consumers. A so-called exemption was supposed to ‘protect’ small community banks and credit unions from the law’s harmful price controls,” the groups wrote. “The Durbin Amendment has not delivered on any of these promises, providing benefits only to retailers, and must be repealed.”

In addition to driving up the cost of banking services, the groups pointed out that the Durbin Amendment has also slowed innovation, presenting “one of the leading obstacles to the development of a low-cost, highly functional mobile banking platform that could provide not only essential financial services for millions of low-income and young consumers, but also their first step toward full financial inclusion.”

The Financial Choice Act, which passed the House Financial Services Committee on Tuesday, includes a provision to repeal the Durbin Amendment.

Read the letter.

Bipartisan Agreement to Examine CU Taxation and Regulation

During a Candidate Forum in Iowa, the Quad City Times reported that candidates for federal office indicated a willingness to examine how credit unions are taxed and regulated.

The willingness to examine the regulation and taxation of credit unions was bipartisan.

Kim Weaver, a Democrat running for Congress in western Iowa’s 4th District, stated: "I would definitely support reviewing the regulations and seeing if they actually fit today, They are, in some parts, unfair to community banks."

Chris Peters, a Republican running for Congress in eastern Iowa’s 2nd District, said: "If they do the same things (as banks), they should be taxed at the same rate. If they’re straying outside their original charter, I think they should be taxed the same (as banks)."

The forum was hosted by the Community Bankers of Iowa at Prairie Meadows Convention Center on Thursday, August 11. Other issues explored during the candidate forum were the regulatory burden from Dodd-Frank Act and the Farm Credit System -- a retail government sponsored enterprise.

Read the story.

Diversity and Corporate Governance

Federal regulators and policymakers want to increase the level of diversity at financial institutions, including their boards.

Beginning in 2010, Section 342 of the Dodd Frank Act created the Office of Minority and Women Inclusion (OMWI). One of the goals of OMWI was to assess the diversity policies and practices of entities regulated by the various federal agencies.

In 2015, federal bank regulators and the Securities and Exchange Commission issued a final rule establishing standards for regulated entities to create and strengthen their diversity policies and practices — including their organizational commitment to diversity, workforce and employment practices, procurement and business practices, and practices to promote transparency of organizational diversity and inclusion within the entities' U.S. operations.

NCUA as part of this final rule issued a voluntary self-assessment checklist that provides credit unions with best practices for assessing their diversity policies and practices.

However, my experience is that voluntary best practices tend to become what is expected by examiners.

In a June 2016 speech, Securities and Exchange Commission (SEC) Chairman Mary Jo White stated that "the low level of board diversity in the United States is unacceptable." She believes increasing board diversity is the right thing to do.

To address the issue of board diversity, Chairman White stated that the agency staff are working on a proposed rule that would require public companies to include in their proxy statement “meaningful disclosures” of the race, sex and ethnicity of their board members and board nominees. Chairman White commented that the disclosures would be based on voluntary self-reporting by directors.

While SEC regulations do not apply to credit unions, I suspect that it is only a matter of time before credit unions, as well as other non-publicly traded financial institutions, would be subject to such disclosure about board members and nominees, as it would be viewed as good corporate governance.

While greater board diversity is a positive, having the federal government mandate it is not.

Bill Would Repeal Durbin Amendment

Rep. Randy Neugebauer (R-Texas) introduced legislation, H.R. 5465, to repeal Section 1075 of the Dodd-Frank Act, better known as the Durbin Amendment.

The Durbin Amendment imposed a cap on debit interchange fees charged by banks and credit unions with $10 billion or more in assets.

In introducing the bill, Rep. Neugebauer stated:

"Sen. Dick Durbin (D-Ill.) and the retail lobby sold Congress on the need for debit swipe fee reform under the guise that consumers would see significant savings if the government controlled the price of these transactions. Instead, several studies, including research from the Federal Reserve Bank of Richmond, have definitely shown that consumers have not received any passed-through savings. Some studies have even shown that these price caps have resulted in reduced free checking accounts and higher minimum balances for consumers. Further, some small businesses and those with a high volume of small-dollar transactions are actually fairing worse with the price caps in place – a strange twist for the retail industry, which was lobbying so hard for the Durbin Amendment’s adoption."

Rep. Neugebauer concluded: "This legislation will restore competition in the marketplace, remove arbitrary government price caps, and ensure consumers have affordable access to basic banking services."

This is legislation that both banks and credit unions can support.

Read the press release.

NCUA Proposes Incentive-Based Compensation Rule

The National Credit Union Administration (NCUA) Board members unanimously approved a proposed rule (Parts 741 and 751), mandated by section 956 of the Dodd-Frank Act, that would require federally insured credit unions with assets of $1 billion or more to provide NCUA with information about the structure of future incentive-based executive compensation programs.

The Dodd-Frank Act requires NCUA and five other federal financial regulators to act jointly to prohibit incentive-based compensation payment arrangements in financial institutions with $1 billion or more in assets that the agencies determine encourage inappropriate risks by providing excessive compensation or that could lead to material financial loss.

The proposed rule supersedes an earlier rule proposed by regulators in 2011.

The proposed rule creates a tiered system by dividing financial institutions covered under the rule into three categories, each with separate requirements:
Level 1: institutions with assets of $250 billion and above;
Level 2: institutions with assets of at least $50 billion and below $250 billion; and
Level 3: institutions with assets of at least $1 billion and below $50 billion.

Only 258 federally insured credit unions have assets above $1 billion at the end of 2015. Of those, only one federally insured credit union, Navy Federal Credit Union, falls into Level 2. No federally insured credit union is classified as a Level 1 institution under the proposed rule.

The proposed rule does not affect base salary or base benefit plans. Incentive-based compensation plans that existed before the effective date of the final rule will not be affected. The rule would not affect newly created incentive compensation plans at a covered credit union until the first day of the first calendar quarter beginning 18 months after the final rule has become effective.

Institutions covered by the proposed rule would be required to create records documenting the structure of all incentive-based compensation plans, retain those records for seven years, and provide them to NCUA upon the agency's request.

Boards of directors of covered credit unions or a committee thereof would be required to exercise oversight of such compensation plans. The proposed rule includes a provision to address equitable tax treatment for incentive-based compensation plans in covered credit unions.

Both Level 1 and 2 institutions would be required to defer a percentage of qualifying incentive-based compensation for executives and significant risk takers for a specified amount of time. Level 1 institutions would be required to defer 60 percent for executives and 50 percent for significant risk takers for a minimum of four years, while Level 2 institutions would be required to defer 50 percent for senior executives and 40 percent for significant risk-takers for a period of at least three years. Regulators would have discretion over requirements for Level 3 institutions.

In cases of employee fraud, intentional misrepresentation or misconduct resulting in significant financial or reputational harm to the institution, some or all of the compensation would be subject to claw-back recovery.

Read the proposed rule. Read the two page guide.

Small Business Data Collection on Bureau's Rulemaking Agenda

On the Consumer Financial Protection Bureau's regulatory agenda for the next year is the collection of information on financial institutions' lending to women-owned, minority-owned, and small businesses.

This data collection is mandated by the Section 1071 of Dodd-Frank Act.

According to the Dodd-Frank Act, the purpose of this data collection is to facilitate enforcement of fair lending laws and enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority- owned, and small businesses.

According to the Dodd-Frank Act, the following information will be collected by the Consumer Financial Protection Bureau (Bureau):

(A) the number of the application and the date on which the application was received;
(B) the type and purpose of the loan or other credit being applied for;
(C) the amount of the credit or credit limit applied for, and the amount of the credit transaction or the credit limit approved for such applicant;
(D) the type of action taken with respect to such application, and the date of such action;
(E) the census tract in which is located the principal place of business of the women-owned, minority-owned, or small business loan applicant;
(F) the gross annual revenue of the business in the last fiscal year of the women-owned, minority-owned, or small business loan applicant preceding the date of the application; ‘‘(G) the race, sex, and ethnicity of the principal owners of the business; and
(H) any additional data that the Bureau determines would aid in fulfilling the purposes of this section.

The Bureau indicated that its data collection efforts will build off a similar rule it finalized regarding the collection of home mortgage lending data.

This data collection mandate will impose a new regulatory burden on banks and credit unions.

Read the Bureau's Fall Rulemaking Agenda.

Small Business Loan Reporting Nightmare Recommendations

The National Community Reinvestment Coalition (NCRC) released a white paper on recommendations to the Consumer Financial Protection Bureau (CFPB) on the implementation of Section 1071 of the Dodd-Frank Act dealing with small business loan data collection.

The purpose of Section 1071 is to facilitate enforcement of fair lending laws and enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority-owned, and small businesses.

The proposed recommendations would increase the reporting burden on banks, credit unions, and other non-depository lenders to small businesses.

The law requires the CFPB to collect data on the race and ethnicity of the borrower. However, NCRC recommends that it is not enough to require disclosures of whether the business is Asian or Hispanic; but should consider sub-categories to fully capture the experiences of Asians and Hispanics of various nationalities in the marketplace.

Also, the law requires the reporting of revenue size of the small business. NCRC wants this required disclosure to be sufficiently detailed so that policymakers and the general public can track loans to microbusinesses.

In addition to the other required data elements that are to be collected, NCRC is recommending that CFPB collect information on the pricing of the loan, points and fees and loan terms, creditworthiness of the small business and its owner, the number of employees of the small business, colateral pledged by borrowers, start up status of the business, and loan performance.

Read the white paper.

HMDA Proposal Would Increase Reporting Burden

The Consumer Financial Protection Bureau (CFPB) has issued a 573-page proposed rule that would significantly increase the reporting burden on Home Mortgage Disclosure Act (HMDA) filers.

The proposed rule would mandate financial institutions to report 37 new additional data fields under HMDA. In keeping with the Dodd-Frank Act requirements, the rule would require lenders to report for the first time property value, loan term, total points and fees, the duration of teaser rates and the age and credit score of the applicant or borrower. The CFPB also proposed that lenders submit data on an applicant’s debt-to-income ratio, interest rate and total points charged, which the bureau said would help it evaluate the impact of its mortgage rules. With only a few exceptions, all dwelling-secured loans would be subject to the rule.

The CFPB further proposed a single threshold -- 25 mortgages originated annually, excluding open-end lines of credit -- at which financial institutions become subject to the rule. The CFPB estimates that approximately 1600 depository institutions would no longer be subject to HMDA reporting, while almost 450 nondepository institutions would now have to report their HMDA data.

In addition, financial institutions that reported at least 75,000 covered loans, applications, and purchased covered loans, combined, for the preceding calendar year, would be required to report data quarterly. THE CFPB estimates 28 financial institutions would be subject to the new quarterly reporting requirements based on 2012 HMDA data.

While the proposal would reduce the reporting burden on banks and credit unions that originate few mortgages, for all other banks and credit unions the reporting burden will significantly increase.

CFPB Proposal Would Subject Banks and CUs to Reputational Risk

Several years ago, I spoke to the 33rd Annual National Directors' Convention in Las Vegas about the huge threat that the Consumer Financial Protection Bureau (CFPB) poses to banks and credit unions.

The latest example of this threat is a new proposal by the CFPB to publish consumers’ narratives in its consumer complaint database. A company subject to a complaint would be given an opportunity to post a response that would appear next to a customer’s story. If the company does not respond in 15 days, the complaint narrative would be published.

The CFPB states that "by giving consumers an option to publicly share their stories, the CFPB would greatly enhance the utility of the database, a platform designed to provide consumers with valuable information needed to make better financial choices for themselves and their families."

But unlike YELP, the CFPB database will not include information about favorable consumer experiences.

The public disclosure of unverified consumer complaint narratives will not advance the goal of helping consumers to make informed and responsible financial decisions. However, it will subject financial institutions to reputational risk.

Read the press release.

Why is NCUA a Voting Member on FSOC?

The Dodd-Frank Act created the Financial Stability Oversight Council (FSOC). FSOC is made up of ten voting members and five nonvoting members.

But should the National Credit Union Administration (NCUA) be a voting member?

A report by the Bipartisan Policy Center to create a more effective regulatory architecture recommended making NCUA a non-voting member on the FSOC.

The report noted that "while it is useful to have representation on the FSOC from the NCUA, it makes little sense for the NCUA to have a vote equal to the Federal Reserve on all matters before the Council, particularly when the NCUA does not oversee a single institution that meets the criteria established by Congress or the FSOC as requiring enhanced supervision due to systemic importance."

The report recommends that "[t]he chair of the NCUA should become a non-voting member. Credit unions are an important part of the U.S. financial system, but they generally are small and do not figure into macro-prudential discussions. To the extent they do, a credit union voice will still be represented on the FSOC, but without a vote."

This recommendation really irked one credit union blogger, who wrote "[t]his is bureaucratese for patting credit unions on the head and sending them to the corner with crayons while the adults do all the important work."

Read the report.

Reporting Requirements for HMDA Filers to Increase

Banks and credit unions that are HMDA (Home Mortgage Discloure Act) filers are going to see an increase in their reporting burden.

In prepared comments on Friday, February 7, Consumer Financial Protection Bureau (CFPB) Overlord Director Richard Cordray stated that the Dodd-Frank Act requires lenders to collect and report on specific new information as part of the HMDA process. The new information to be collected and reported by HMDA filers include: the total points and fees; the term of the loan; the length of any teaser interest rates; and the borrower’s age and credit score.

But Cordray did not stop there.

He stated that the agency is contemplating requiring lenders to collect more information about underwriting and pricing. For example, the CFPB may ask lenders to gather information on the applicant’s debt-to-income ratio, the interest rate, the total origination charges, and the total discount points of the loan.

In addition, the agency is thinking about requiring lenders to explain why they rejected a loan application and whether the lender considered the loan to be a Qualified Mortgage.

Read Cordray's speech.

Reforming the NCUSIF Is a Legislative Priority for NCUA

In its draft 2014 - 2017 Strategic Plan, the National Credit Union Administration (NCUA) identified one of its legislative priorities as "[i]mproving NCUA’s ability to manage the NCUSIF by providing more flexibility in setting the normal operating level and building retained earnings for the NCUSIF in a manner consistent with the size and complexity of the credit union industry and financial stability goals."

The Federal Credit Union Act defines the normal operating level as an equity ratio specified by the Board, which shall be not less than 1.2 percent and not more than 1.5 percent. The NCUA Board is currently setting the normal operating level at 1.30 percent of insured deposits (shares).

NCUA is also required distribute excess funds from the NCUSIF, if the NCUSIF equity ratio is greater than the normal operating level and the available assets ratio is above 1 percent. This assumes that all borrowings from the Federal government had been repaid with interest.

But what does it mean to provide more flexibility in setting the normal operating level and to build retained earnings for the NCUSIF in a manner consistent with the size and complexity of the credit union industry?

The Strategic Plan unfortunately does not provide any details.

While I don't know what NCUA intends to propose, recent legislative and regulatory developments dealing with the FDIC Deposit Insurance Fund (DIF) may provide some guidance.

The Dodd-Frank Act set a minimum Designated Reserve Ratio for the DIF at 1.35 percent of insured deposits (the former minimum was 1.15 percent). The Dodd-Frank Act also removed the upper limit on the Designated Reserve Ratio, which had been capped at 1.50 percent. This effectively removed any limit on the size of the DIF. In addition, the Dodd-Frank Act eliminated the requirement that FDIC provide dividends from the DIF when the reserve ratio was between 1.35 percent and 1.50 percent and gave the FDIC Board the sole discretion in determining to pay dividends if the DIF reserve ratio was at least 1.50 percent.

With no cap on the DIF Designated Reserve Ratio, the FDIC Board in December 2010 adopted a final rule setting the minimum Designated Reserve Ratio at 2 percent. In addition, the FDIC Board in February 2011 decided to indefinitely suspend the payment of dividends.

While you may not agree with this outcome, I would contend that there are strong incentives for NCUA officials to pursue a similar path. NCUA officials are risk-averse. The last thing NCUA officials want is to go to Congress requesting assistance like they did in 2009 regarding the corporate credit union debacle. By increasing the size of the NCUSIF fund, this would lower the probability of future congressional assistance.

CU Discount Window Loans, Q4 2011

In the fourth quarter of 2011, 20 credit unions borrowed from the Federal Reserve's Discount Window. The total amount borrowed during the quarter was $82.6 million.

The Dodd-Frank Act requires the Federal Reserve to release detailed transaction information about discount window lending to depository institutions. The information is released with a two-year time lag.

The average amount borrowed was just shy of $2.2 million, while the median-size discount window loan was $384,000.

The most active borrowers from the discount window were Mutual Savings CU of Atlanta (GA) and Building Trades FCU of Maple Grove (MN). Mutual Savings CU accessed the discount window 10 times during the quarter and Building Trades FCU borrowed 8 times from the discount window during the fourth quarter of 2011.

The largest amount borrowed was $25 million by Delta Community CU of Atlanta (GA).

One credit union, North Star Community CU in Maddock (ND), accessed the Federal Reserve's seasonal credit program.

Below is a list of the credit unions that borrowed from the discount window and the amount they borrowed (click on image to enlarge).