Credit Union Journal (subscription required) reported today that NCUA has imposed a supervisory agreement on Kern Schools FCU to rebuild its capital.
Credit Union Journal wrote that "the confidential agreement with NCUA was disclosed yesterday by Vincent Rojas, the departing CEO."
The story states that NCUA has given the credit union 24 months to restore its capital ratio to 7 percent -- the minimum requirement to be well capitalized.
Enforcement actions, such as written agreements, ceased and desist orders, and prompt corrective action capital directives, taken against banks by federal banking regulators have been public information since 1989.
The Federal Credit Union Act requires enforcement actions to be made public unless the Board determines it is not in the public interest to release this information.(emphasis added)
How would the publishing of this supervisory agreement be contrary to the public interest?
At the minimum, shouldn't Kern Schools members know whether their credit union is subject to an enforcement action?
Moreover, we know there are 326 problem credit unions from NCUA's Chairman Deborah Matz's testimony from last week.
So, how many other supervisory agreements have been not disclosed by NCUA?
What is this agency covering up?
Funny, but the FDIC does not publish their watch list either. It seems to me both agencies should strive for more transparency with regards to letting the public know what is going on.
ReplyDeleteAgain, another instance of you only telling one side of the story Keith. Keep fighting the fight!
99 failed banks and counting! I hope the ABA does not lose too much revenue as a result of all these failures...
As much as it kills me, I must agree with Dr. Leggett. The NCUA should be publishing this information just like the Federal Reserve does for banks that need capital and the institution agrees to raise such capital. My concern is in the Bakersfield Californian which states that a board member did not know this agreement existed. That is shocking!
ReplyDeleteDear Anonymous:
ReplyDeleteUnfortunately, you missed the point.
You cannot find any recent information on NCUA's website regarding enforcement actions.
This is not the case for the federal banking regulators.
For example, if you go the below link and click on year, you will see all the enforcement actions for FDIC regulating banks in that year. http://www.fdic.gov/bank/individual/enforcement/begsrch.html
Referencing the number of problem CUs was meant to highlight this lack of transparency.