Blog Archive

0

NCUA signals that secondary capital is open for business

first_img 1SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Michael C. Macchiarola Mike is the CEO of Olden Lane LLC. Prior to joining Olden Lane, he was a Managing Director for Product Development at Equinox Financial Solutions, where he was heavily involved … Web: www.oldenlane.com Details On September 16, 2019, in a Supervisory Letter to “All Field Staff,” the National Credit Union Administration (NCUA) published new guidance for evaluating secondary capital plans.  A separate Supervisory Letter from Chairman Rodney Hood and addressed to the Board of Directors and Chief Executive Officer of each federally insured credit union accompanied the release. Across an impressive twenty-three (23) pages, and in thorough detail, the guidance “updates the framework the NCUA uses to analyze and approve or deny secondary capital plans” and outlines the criteria and procedures by which the agency will continue to consider secondary capital plans submitted by low income designated credit unions (LICUs).  A copy of the Supervisory Letter is available on the NCUA website here.Since 1996, LICUs have been permitted to accept uninsured secondary capital from institutional investors. In 2015, the NCUA amended its Supervisory Manual to streamline the application process in an attempt to make secondary capital easier for investment. Today, more than two decades after its secondary capital vision was first implemented, the NCUA concedes that its success “has been mixed.” And, the program’s reach has, undoubtedly, been less than many had hoped. In fact, the number of credit unions taking advantage of secondary capital has steadily shrunk from an all-time high of 80, in 2012, to today’s 68. This week’s guidance seems aimed at addressing much of the mystery that has shrouded the secondary capital application process in recent years. Against that backdrop, we accept the policy statement articulated in Chairman Hood’s letter:“Many LICUs have a record of prudently using secondary capital to increase regulatory capital levels to protect against future losses and serve as a foundation for strategic initiatives and growth. Secondary capital accounts have served as a valuable resource to some LICUs, enabling them to provide much needed lending and other member services to underserved communities.”Before evaluating the NCUA’s guidance, we caution, as the NCUA does, that “[e]ach secondary capital plan is unique to the applicant LICU, and the evaluation of secondary capital plans is a fact-specific engagement that varies based on the unique characteristics of each LICU.” Nonetheless, the Supervisory Letter is a welcomed development to the secondary capital landscape. And, based on Olden Lane’s review, the guidance reflects standards that have been in place for some time – but have not been clearly and comprehensively articulated in public materials until now. We are hopeful that this publication will improve the application process, reduce the number of denials and alleviate frustrations that have been felt by many. We applaud the NCUA for its publication of this material which we regard as the most significant development in secondary capital since 2015.The Supervisory Letter provides a framework for those LICUs already involved in the secondary capital process or seeking to better understand what the process entails. It also answers some of the recent arguments of naysayers who have complained that the agency is somehow engaged in a process of systematic denial or not interested in allowing LICUs to access this form of regulatory relief. At Olden Lane, we have long thought that such critiques are more the product of excuse making than any accurate reflection of reality. Nonetheless, with this thorough guidance, the expectations are now front and center and in granular detail for any LICU interested in successfully navigating the process. After summarizing the legislative and regulatory background of the current secondary capital regime, the Supervisory Letter outlines the express requirements of Section 701.34. The section provides that before offering secondary capital, a LICU must adopt and forward to the NCUA for approval a written secondary capital plan that, at a minimum:States the maximum aggregate amount of uninsured secondary capital the LICU plans to issue,Identifies the purpose for which the aggregate secondary capital will be used, and how it will be repaid,Explains how the LICU will provide for liquidity to repay secondary capital upon maturity of the accounts,Demonstrates that the planned uses of secondary capital conform to the LICU’s strategic plan, business plan, and budget, andIncludes supporting pro forma financial statements, including any off-balance sheet items, covering a minimum of the next two years.Those who follow this market closely will pay particular attention to the discussion that follows this part of the Supervisory Letter. Here, the agency offers its rebuttal to the recent criticism that “credit unions have had a ‘zero batting average’ for secondary capital plan appeals to the Supervisory Review Committee (SRC) of NCUA during the first seven months of 2019.” The NCUA restates its long-held position that 701.34’s requirements represent only the “minimum information a LICU must include in a secondary capital plan,” because “the safety and soundness principles on which the NCUA’s analysis is grounded” are “implicit in the minimum requirements.”  At Olden Lane, we are generally simpatico with this position. To insist otherwise is (1) to apply an overly mechanical reading to the regulation, (2) frustrating to the congressionally mandated purpose of the NCUA to ensure the safety and soundness of insured credit unions, and (3) inconsistent with the desire of the 2006 amendments which expressly granted approval authority to the Regional Directors. As the Supervisory Review Committee observed at the most recent appeal, “[w]hen we consider the examples of lenient practices and the Board’s stated objectives for the revised rule, it is clear the Board’s intent was for regional directors to consider safety and soundness in the review and critique of secondary capital plans.” We do caution, however, that just as an overly technical reading of the 701.34 requirements could lead to absurd results, so too could a reading of the provisions that provides the Regional Directors with unlimited laxity in denying approvals. And so, if nothing else, the Supervisory Letter represents an important contribution to eliminating any arbitrary reasons for withholding approvals.The guidance proceeds to identify “[s]pecific examples of reasons a LICU might use secondary capital” as part of its overall strategy. These include (1) enhancing earnings, (2) restoring regulatory capital to a minimum desired level, and (3) increasing regulatory capital to a desired level based on risk or to support future growth or other member service initiatives. With respect to each of these identified reasons for secondary capital, the Supervisory Letter highlights the general parameters of how the agency would scrutinize a plan to determine whether the requested secondary capital compromises the requesting LICU’s safety and soundness.  Here, the new guidance describes a host of requirements not explicit in the secondary capital regulations included in NCUA Rule 701.34.  By now, many of these hurdles are recognizable to LICUs that have submitted plans. These include:  Analysis and consideration of a range of plausible assumptions (optimistic and pessimistic) for both growth and portfolio performance metrics;Scenario analysis addressing various risk assessments and forecasts;Liquidity assessments under pessimistic scenarios; andModeling the risk characteristics of increased borrowings and/or adding higher risk loans and investments to portfolios (if relied on in the secondary capital plan) adequately for credit, liquidity, and interest rate risk purposes. The Supervisory Letter is filled with additional detail and nuance with respect to a whole host of issues that have heretofore played out only in the back and forth of individual plan submissions. For example, there is clarification on such items as:the level of detail required on off-balance sheet items; the appropriate use of third party vendors in the preparation of a plan;the sliding scale of review depending on a plan’s complexity; the technicalities of the procedures and timeframes for state-chartered LICUs seeking secondary capital; andthe additional scrutiny that will accompany a levered growth strategy.Finally, the Supervisory Letter makes clear that, as part of its review process, the NCUA will examine an applicant LICU’s (1) due diligence process, (2) financial condition, (3) operation condition and (4) risk management processes and board oversight. Quite properly, the agency views each of these as integral to the success of any secondary capital plan. Likewise, we continue to caution clients that secondary capital is anything but simple. In our experience, successful secondary capital plans (1) incorporate secondary capital as part of the credit union’s broader overall strategy, and (2) are the product of thorough preparation and a deliberate, ongoing and thoughtful process. In our view, the Supervisory Letter is a significant contribution toward ensuring that the NCUA and credit union’s themselves are better prepared to separate good secondary capital plans from bad. As such, we applaud the agency for its work. And, we caution all involved in the process that these consistent, logical and thoughtful rules are the first step. Now, it is up to the LICU applicants to heed them and the NCUA to apply them consistently.last_img read more

0

Board of Control for Cricket in India (BCCI) Asks Franchises To Prepare Sporting Wickets

first_imgNew Delhi: The first match of the Indian Premier League (IPL) saw Chennai Super Kings bundling out Royal Challengers Bangalore (RCB) for just 70 runs at the MA Chidambaram Stadium in Chennai on Saturday. While both CSK skipper M.S. Dhoni and his RCB counterpart Virat Kohli said that the pitch wasn’t how they had expected it to be, former Australia and CSK opener Mathew Hayden called it “below standard”.The Board of Control for Cricket in India (BCCI) has now asked the IPL franchises to prepare sporting wickets for the rest of the tournament.Speaking to IANS, a senior BCCI official said that while the board doesn’t interfere with the wickets prepared during the popular T20 league, it should not be heavily tilted towards either the batsmen or the bowlers.”The franchises have the freedom to prepare wickets without the interference of the BCCI, but the wickets should be sporting and not heavily titled in favour of either the batsmen or bowlers,” the official said. IANSAlso Read: SPORTS NEWSlast_img read more

0

WHS Daily Bulletin: FFA students do well in Dairy Foods Career Development event at Winfield

first_imgby Tracy McCue, Sumner Newscow  — Today’s Wellington High School bulletin for Thursday, Nov. 19, 2015:Nothing scheduled for this week.Today’s Lunch — Thanksgiving Dinner: Chicken and Dressing, Mashed Potatoes with Gravy, Green Beans, Hot Roll, Pumpkin Dessert, Yummy Yams and Milk.Friday’s Lunch —  Pork Rib with Bun, Shredded Romaine and Tri-Tater, Golden Corn, Chilled Pears, Tortilla Chips and Milk.Today’s News: *Scholars’ Bowl is out at 3 p.m. today. They will be marked Activity.*Football players- Don’t forget about the football banquet on Monday at 7 p.m. in the commons. Bring a dessert.* Congratulations to the FFA students that competed yesterday in the Dairy Foods Career Development Event at Winfield.The A- Team placed 3rd Over-allThe B-Team placed 1stThe Greenhand Team placed 3rdPlacing Individually was Moriah Lyne who was 6th over all, Joshua Quanz placing 13th and Shane Hughes placing 14th. Congratulations Students!*Circle of Friends will meet today at 1 p.m. in the auditorium. Everyone should have a ticket, if not, see Miss Gray before 1 p.m..*November 30th during lunches a representative from Barbizon Modeling Agency will be here. Scholarships are available through this agency to assist students with college tuition.*Attention Wellington High students! Do you enjoy photography?  Are you a great photographer?  A photography contest is taking place now!  The subject of your photographs can be anything that screams Wellington. Photos must be taken by you this semester.  File size must be at least 16 x 20 inches and cannot be taken with a camera phone. Only 3 entries per person.  Winners photos will be printed and used to decorate USD 353 central offices.  Deadline is Dec 20!  There will be cash prizes! Please submit digital files to Mrs. Groom.*There will be a short informational meeting for students interested in being on the New Wellington High School Shooting Sports Team after school today in the auditorium. This will be an interest and information meeting.  If you cannot attend there will be another meeting in early December for students and parents to attend.*If you’re still planning on taking the CNA class in the Spring, you will be getting a CAPPS form from Mrs. Hatfield. Please fill out the form and enroll in the CNA class online at cowley.edu. After you enroll online, drop your CAPPS form off in the counselor’s office.*SUP Crusaders! Starting this week, in light of Bill Cordes’ talk on School Unity we are doing a 5-day challenge.  On the school unity bulletin board in the commons, there will be a list of all the challenges.  When you complete a challenge, put a small tally mark under the challenge on the sheet of paper.  Complete as many as you can over the course of the week.  There will be sticky notes at the bottom to leave any comments you may have about your experience.  Also, upload your pictures and comments to any social media with the hashtag #SUPCrusaders or #SUPWHSBillCordes*Interested in joining Color Guard??  There will be an informational meeting today after school in room 112.*NHS is hosting the winter formal dance on December 4th- 8:30 pm to 11pm. Admission is $5 , or you can bring 5 non perishable items.Fun Fact of the Day:According to the Guinness Book of World Records, the Largest Pumpkin Pie ever baked weighed 2,020 pounds and measured over 12 feet long. It was baked on October 8, 2005 by the New Bremen Giant Pumpkin Growers in Ohio. It included 900 pounds of pumpkin, 62 gallons of evaporated milk, 155 dozen eggs, 300 pounds of sugar, 3.5 pounds of salt, 7 pounds of cinnamon, 2 pounds of pumpkin spice and 250 pounds of crust.Follow us on Twitter. Close Forgot password? Please put in your email: Send me my password! Close message Login This blog post All blog posts Subscribe to this blog post’s comments through… RSS Feed Subscribe via email Subscribe Subscribe to this blog’s comments through… RSS Feed Subscribe via email Subscribe Follow the discussion Comments Logging you in… Close Login to IntenseDebate Or create an account Username or Email: Password: Forgot login? Cancel Login Close WordPress.com Username or Email: Password: Lost your password? Cancel Login Dashboard | Edit profile | Logout Logged in as Admin Options Disable comments for this page Save Settings You are about to flag this comment as being inappropriate. Please explain why you are flagging this comment in the text box below and submit your report. The blog admin will be notified. Thank you for your input. There are no comments posted yet. Be the first one! Post a new comment Enter text right here! Comment as a Guest, or login: Login to IntenseDebate Login to WordPress.com Login to Twitter Go back Tweet this comment Connected as (Logout) Email (optional) Not displayed publicly. Name Email Website (optional) Displayed next to your comments. Not displayed publicly. If you have a website, link to it here. Posting anonymously. Tweet this comment Submit Comment Subscribe to None Replies All new comments Comments by IntenseDebate Enter text right here! Reply as a Guest, or login: Login to IntenseDebate Login to WordPress.com Login to Twitter Go back Tweet this comment Connected as (Logout) Email (optional) Not displayed publicly. Name Email Website (optional) Displayed next to your comments. Not displayed publicly. If you have a website, link to it here. Posting anonymously. Tweet this comment Cancel Submit Comment Subscribe to None Replies All new commentslast_img read more

0

ECONEC Advocates Structured Engagements between GEC, Other Political Stakeholders

first_imgECONEC delegation with ECOWAS Spec Rep in Guinea Amb Alapini & development partnersIn continuation of its electoral mid-term follow-up Mission to Guinea, the ECONEC delegation led by Prof. Mahmood Yakubu met on Monday, 11 June, with the ECOWAS Special Representative in the country Ambassador Liliane Alapini, representatives of Civil Society Organizations (CSOs) and development partners, according to a press release.At the talks with the interlocutors including representatives of the EU, USAID (United States Agency for International Development), US, German and Japanese embassies, the American National Democratic Institute (NDI), Guinea’s Independent Electoral Commission, CENI, and three CSOs, Cellule Balai Citoyen, PCUD and CNOSCG, Prof. Yakubu, ECONEC governing board President and Chair of Nigeria’s Independent Electoral Commission (INEC), called for sustained political dialogue, effective communication and structured engagements between CENI and Guinea’s other political stakeholders including development partners.Ambassador Alapini commended ECONEC for working hand in hand with the ECOWAS Commission towards deepening democracy in the region by supporting credible and peaceful polls.On the agenda of the consultations were issues from the disputed results of Guinea’s last February’s municipal elections and areas of further support by ECOWAS, ECONEC, and development partners.Also discussed was the implementation of recommendations of ECOWAS Observation Mission (EOM) to Guinea’s 2015 presidential poll and those in the October 2016 Political Accord, including the restructuring of CENI and other legal and political reforms ahead of the country’s 2019 parliamentary vote and the 2020 presidential election.Prof. Yakubu said that structured engagements would enable the articulation of needs, political inclusive and focus support on the entrenchment of best practices in the electoral process that will contribute to sustained credible elections and consolidation of democracy in the country.The development partners and CSOs’ representatives had harped on the need for the implementation of the recommendations of the ECOWAS EOM’s in the aftermath of the 2015 presidential vote and those contained in the 2016 Political Accord signed by the ruling and opposition parties with ECOWAS, UN, EU, Francophonie organization, and the US and French envoys as observers, the release concluded.Some of the recommendations include reform of CENI to make it more technical and professional, as well as legal and political reforms for a level playing field and sociopolitical climate.Prof. Yakubu pledged that the Mission will reflect in its report to the relevant authorities, areas of support to address the identified needs and strengthen the capacity of CENI Guinea in line with ECONEC’s mandate to empower its members to deliver credible and peaceful elections and contribute to the consolidation of democracy in the ECOWAS region.Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)last_img read more