Mon, Aug 14, 2017
The Advocacy Team attended last week's NCUA webinar on the proposed Stabilization Fund closure and setting the NCUSIF normal operating level at 1.39 percent.
The webinar was led by Larry Fazio, director of NCUA's Office of Examination and Insurance. He outlined the proposal:
- Assets would be transferred from the TCCUSF to the NCUSIF October 1, 2017, using the closing balances as of September 30, 2017.
- The agency projects that the transfer would raise the Fund’s equity ratio as high as 1.47 percent, requiring a distribution to credit unions.
- The Board proposes to increase the normal operating level for the Share Insurance Fund to 1.39 percent.
- Raising the normal operating level still would allow for a distribution to credit unions in 2018.
- It would also allow the Share Insurance Fund to withstand a moderate recession without the equity ratio dropping below 1.20 percent, at which point federal law requires the agency to charge a premium or develop a fund restoration plan. At 1.39 percent, the Board would also ensure credit unions’ one-percent contributed capital deposit is well-protected.
The NCUA projects the 2018 distribution to credit unions would be $600 to $800 million with a total projected distribution of $1.4 to $1.7 billion, with the balance to be paid at a later date.
The Advocacy team is drafting a commend letter based on feedback from credit unions. Comments are due to the NCUA by Tuesday, September 5, 2017.