ALEXANDRIA, Va.-Growing losses and failures among credit unions are expected to result in additional charges assessed credit unions of as much as $3 billion next year, agency officials said last week.
Melinda Love, chief examiner for NCUA, said during last week's NCUA Board meeting that projected losses for the National CU Share Insurance Fund have grown to $673 million so far in 2009 and could be as much as $1.7 billion in 2010. In addition, the assessment for the newly created Corporate CU Stabilization Fund could be as much as $1.1 billion next year.
Federally insured credit unions paid a $1.1-billion assessment this year to replenish reserves in the fund due to losses on both natural person credit unions and corporates.
But NCUA said the reserve ratio on the fund, which the special assessment was supposed to raise back to 1.30 (dollars reserved per $100 of insured deposits) had fallen back to 1.28 at the end of October, mostly due to $171 million in additional losses projected from failed credit unions, including three large failures in Nevada.
The loss projections for next year are based on the growing numbers of CAMEL 4s and 5s, at 337 at the end of October, and of CAMEL 3s, at 1,640.
So far in 2009 there have been 25 failures of natural person credit unions.
