ALEXANDRIA, Va. (10/24/08)—The National Credit Union Administration (NCUA) is actively seeking parity for credit unions by requesting credit union inclusion in U.S. Treasury Department's recently expanded deposit insurance coverage of non-interest bearing deposit accounts.
'Based on the belief that the policies of the National Credit Union Share Insurance Fund (NCUSIF) should be generally consistent with those of the (Federal Deposit Insurance Corp.) FDIC, I believe that there should be full share insurance coverage for non-interest-bearing transaction accounts temporarily through 2009," said Fryzel in an announcement Thursday.
He added that he has sent a letter to Treasury Secretary Henry Paulson requesting Treasury to establish a parallel guarantee for credit unions" in order to avoid any unintended impact on the credit union system."
The FDIC program for insured banks and thrifts included the FDIC guarantee for all funds in such a non-interest bearing deposit accounts. Under the program, for the first thirty days all insured banks and thrifts would be covered. After that time, the accounts at institutions that do not opt out and thus agree to a 10-basis point insurance assessment will be covered.
NCUA's Fryzel noted the importance for consumers in "the federal government creating a uniform regime regarding insured deposits."
"Given the uncertainty and turmoil in the markets, it is critical that consumers have confidence in the guarantee that stands behind funds in these non-interest bearing transaction accounts, regardless of what type of insured institution is providing the service," he added.
Last week, Dan Mica, president/CEO of the Credit Union National Association (CUNA) Wednesday, wrote to each member of the NCUA board to warn that federally insured credit unions will be competitively disadvantaged unless federal regulators move quickly to provide full share insurance coverage for non-interest bearing transaction accounts.
"Failure by NCUA to address this issue for credit unions could undermine credit unions' hard-won success in serving small businesses and others in their communities," the CUNA letter said.
courtesy of cuna.org