The NCUA board of directors yesterday approved folding the Temporary Corporate Credit Union Stabilization Fund in to the Share Insurance Fund, and raising the normal operating level to 1.39 percent.
According to the agency, credit unions will avoid a possible Share Insurance Fund premium in 2017 and possibly receive a distribution in 2018 under an approved plan to close the Stabilization Fund on Oct. 1. NCUA estimates the 2018 distribution will be in the range of $600 million to $800 million. There may anywhere from $600 million to $1.1 billion of potential future distributions.
In an effort to ensure the fund maintained sufficient equity, the board approved raising the Share Insurance Fund’s normal operating level from the current 1.3 percent to 1.39 percent–a move the New York Credit Union Association opposes.
“While the New York Credit Union Association appreciates NCUA’s plan to close the Stabilization Fund early, we continue to have concerns about the increase in the normal operating level,” said Association President/CEO William J. Mellin. “We understand the need to guard against future shocks, but the agency must ensure that credit unions are paid back all the funds they are owed.”
Mellin submitted a comment letter to the agency earlier in the month.
During yesterday’s meeting, the board also approved the agency’s proposed 2018–2022 Strategic Plan, issued with a 60-day public comment period, issued a notice of proposed rulemaking to revise the agency’s advertising rule.
For more information on Thursday’s board meeting, visit NCUA’s website.