December 19, 2005
Mail Stop 4561
By U.S. Mail and Facsimile to (202) 336-7666
Richard L. Reed
Chief Financial Officer
National Consumer Cooperative Bank
1725 Eye Street N.W., Suite 600
Washington, D.C. 20006
Re: National Consumer Cooperative Bank
Form 10-K for Fiscal Year Ended December 31, 2004
Filed April 1, 2005
File No. 002-99779
Dear Mr. Reed:
We have reviewed your response dated October 17, 2005, and
have
the following additional comments. Where indicated, we think
you
should revise future filings in response to these comments and
provide us with a draft of your intended revisions. If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure. After reviewing this information, we may raise
additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations
Uses of Funds - Loans and Leases, page 20
1. We note your response to comment 8 of our letter dated
September
30, 2005. Please tell us whether upon the initial transfer of
loans
to the conduit you recorded any retained interests in the
transferred
loans. If so, tell us how the repurchase of the transferred loans
impacted your accounting for such retained interests.
Consolidated Financial Statements
Note 16 - Long-Term Debt, page 51
2. Please revise future filings to provide the following
disclosures
as required by paragraph 22 of Rule 5-02 of Regulation S-X for
each
type of obligation:
* the general character of each type of debt including the rate of
interest;
* the date of maturity, or, if maturing serially, a brief
indication
of the serial maturities;
* if the payment of principal or interest is contingent, an
appropriate indication of such contingency;
* a brief indication of priority; and
* if convertible, the basis.
Note 24 - Financial Instruments with Off-Balance Sheet Risk and
Derivative Financial Instruments, page 59
3. We note your response to comment 13 of our letter dated
September
30, 2005 with respect to your fair value hedges of warehouse
loans.
In your response you state that you maintain the existing hedge
relationships when loans are swapped for MBS as part of the Fannie
Mae program. In your response to comment 14 you also indicate
that
all hedging relationships are established at the individual loan
level rather than for a pool of loans. Please advise us as
follows
with respect to such hedges:
* Tell us how you maintain the existing hedge relationship when
loans
are swapped for an MBS given the fact that you hedge each
individual
loan separately yet the MBS that you receive derives its value
from a
pool of underlying loans.
* Tell us whether you discontinue hedge accounting for the
original
hedge relationship once the loans are swapped for MBS and then re-
designate a new hedging relationship with the MBS. Refer to
paragraph 25 of SFAS 133.
4. We note your response to comment 13 of our letter dated
September
30, 2005 with respect to your fair value hedges of fixed-rate
liabilities. In your response you state that the hedging
relationship is incepted at the moment the rate is fixed on the
debt.
Please advise us as follows with respect to such hedges:
* Clarify whether the hedging relationship is incepted on the date
that the debt is issued (settlement date) or on the date a
commitment
is made (trade date.)
* Describe the market settlement conventions that you have defined
for your issuances of long-term debt.
* If the inception of the hedge is prior to the actual issuance of
the debt, tell us how you determined that this hedge qualified for
shortcut treatment given that paragraph 68 of SFAS 133 is only
applicable to "recognized" interest bearing assets and
liabilities.
Note 27 - Loan Sales and Securitizations, page 66
5. Please revise future filings to provide the disclosures
required
by paragraphs 17(e) - (g) of SFAS 140 with respect to your
securitization activities and servicing assets. Specifically
disclose the methods and assumptions used to measure the fair
values
of servicing assets and other retained interests, including
quantitative information about discount rates, expected
prepayments
and anticipated credit losses.
* * *
Please respond to these comments within 10 business days
or
tell us when you will provide us with a response. Please furnish
a
cover letter with your response indicating your intent to provide
the
requested disclosures in future filings. Detailed cover letters
greatly facilitate our review. Please understand that we may have
additional comments after reviewing your responses to our
comments.
Please contact me if you have any questions regarding
comments
on the financial statements and related matters.
Sincerely,
Angela Connell
Senior Accountant
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Richard L. Reed
National Consumer Cooperative Bank
December 19, 2005
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