Monday, May 23, 2011

Voluntary Prepaid Assessments Should Be Transferable

I have a suggestion that I believe would improve NCUA's proposed voluntary prepaid assessment program for the Temporary Corporate Credit Union Stabilization Fund -- allow federally-insured credit unions to transfer the prepaid assessments among themselves.

This prepaid assessment is just like any asset and credit unions should be able to buy or sell prepaid assessments if there is an economic reason to do so.

Additionally, allowing credit unions to transfer their prepaid assessments among themselves would be a useful liquidity management tool for some credit unions, particularly if there is significant variation between what they prepaid and what they will be actually assessed.

If credit unions are looking for precedent, they only need to look at what FDIC did in 2009. The FDIC allowed for the transferability of bank's prepaid assessments.

No comments:

Post a Comment


The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.