Comments sought as part of a review of NCUA’s Call Report and Credit Union Profile efforts. Also, NCUA to reduce outstanding Stabilization Fund borrowings by sending $700 million to Treasury.
In its third open meeting of the year, the National Credit Union Administration Board approved a more flexible bank notes rule and announced a $302 million net position gain in the Stabilization Fund.
Careful management and improving economy have driven assessment projections into the negative, says Matz.
Stabilization Fund’s first positive position due mainly to projected cash flows, will not trigger refunds, says NCUA.
Northwest credit unions cheered the news this week that there will be no Corporate Stabilization Fund assessment in 2014, saying the decision by the National Credit Union Administration “demonstrates the resiliency of the credit union system.”
Credit unions will receive invoices next month for their 2013 Corporate Stabilization Fund Assessment. The Compliance Report details the NCUA’s plan for the year.
The NCUA cut its 2013 operating budget by $2.6 million—the fourth mid-year budget decrease the agency has approved. The board also set the Stabilization Fund assessment at 8.0 basis points.
The NCUA estimates that the 2013 NCUSIF premium will be between 0-5 basis points, and the stabilization fund assessment will remain between 8-11 basis points, showing “the improving strength of the credit union system.”
The NCUA board of directors this morning approved a budget for 2013 that includes a 6.1-percent increase over 2012, much of which would fund NCUA employee pay and benefits. NCUA Chairman Debbie Matz also said no NCUSIF premium was likely to be needed next year.
At its open board meeting this morning, the NCUA announced that federally insured credit unions will owe 9.5 basis points to fund the 2012 Temporary Corporate Credit Union Stabilization Fund.
On the heels of a data interpretation indicating credit unions could be paying 10 basis points on $5.3 billion corporate stabilization for up to six years, new estimates have reduced the term by one year and lowered the rate by nearly $1 billion.
On the heels of a recent audit, CUNA’s Bill Hampel suggests that in order for credit unions to pay back the remaining $5.2 billion in corporate stabilization funds, the industry could be paying 10bp for the next six years.
The NCUA Board approved the Temporary Credit Union Stabilization Fund at 25 basis points, an assessment estimated to total nearly $2 billion.
The proposed plan for credit unions to prepay assessments for failed Corporate credit unions did not attract enough industry support. The National Credit Union Administration will not proceed in 2011.
The plan adopted would allow credit unions a choice to prepay some their Corporate Stabilization Fund assessment. A free webinar explaining the plan is scheduled for July 11.
In a teleconference last week, the NCUA made two key clarifications about its voluntary Corporate Stabilization prepayment program, which is currently out for comment.
According to the NCUA’s analysis, the Federal Credit Union Act does not allow the agency to charge a mandatory prepaid assessment to all credit unions. However, the agency has developed a plan to allow credit unions to voluntarily prepay some of their stabilization fund assessments.
Corporate Corner is a series of articles that will examine various aspects of the corporate credit union crisis and the NCUA’s plans to resolve the issue and stabilize the industry.