Back To The Future?

The Failure of Capital Corporate Credit Union

United States General Accounting Office

Statement of Charles A. Bowsher

Comptroller General of the United States

Testimony before Congress

February, 1995

(Excerpts)

We Have A Plan! - NCUA

"NCUA's supervision of Cap Corp was ineffective on several fronts.  For four years, NCUA essentially tolerated weaknesses in Cap Corp's internal controls; also, examiners who lacked investment expertise evaluated individual securities rather than securities portfolios, overlooking aggregate interest rate risk. .....Cap Corp's failure raises concerns about interest rate risk being taken on by credit unions, especially in CMO investments..."

"GAO is making one recommendation to Congress and eight to NCUA to improve the safety and soundness of credit unions."

"Recommendation to Congress"

"Congress should continue to oversee NCUA's actions to ensure that an effective regulatory framework for corporate credit unions exists, including adequate capital requirements, and consider legislative action if NCUA fails to implement the needed reforms."

".... if NCUA fails to...."

IF ?!  IF ?!  IF ?!

(If you'd like to read the entire gory details, go to GAO.gov...)