ALEXANDRIA, Va. — The amount of future assessments for the Temporary Corporate Credit Union Stabilization Fund keeps getting smaller.
NCUA announced today that the total future remaining assessments are now projected to be no higher than $1.6 billion. At the end of 2012, the projected range was $1.6 billion to $3.9 billion — and six months prior, the range was $1.9 billion to $4.8 billion
The agency shared that the upper end of the net remaining assessments associated with the Stabilization Fund declined $2.3 billion between December 2012 and July 2013. The decline in remaining assessments is a combination of a $1.6 billion decrease in expected costs and the $700 million assessment collected in October 2013.
CUs received more good news earlier this week when the NCUA Board announced at its Nov. 21 meeting that the agency expects no Stabilization Fund assessment for 2014, in part due to the recently announced $1.4 billion settlement with JPMorgan Chase. The estimates for future assessments released today were calculated from data at the end of the second quarter of 2013 and do not include that settlement.
"A great deal of disciplined work and careful planning has kept the Corporate Resolution on-track, and the new estimates are very good news," NCUA Board Chairman Debbie Matz said. "Our continued recoveries from Wall Street firms responsible for the corporate crisis, now totaling more than $1.75 billion, an improving economy and NCUA's continuing efforts to effectively manage losses are helping reduce future credit union assessments."
Since the Stabilization Fund's creation in 2009, credit unions have paid $4.8 billion in assessments. Although the Stabilization Fund will expire in 2021, assessments may end sooner, the agency said.
In recent years there has been much debate among credit unions over the future amount of the corporate assessments, and much of that future still depends on the strength of the housing market recovery.
In a previous
CU Journal obtained the information from NCUA via a Freedom of Information Act request.
At the time, the firm stated the value NCUA had set on the assets is slightly below the securities' actual value at the end the first quarter of 2013.
"We had the estimated market value of the legacy assets at $21.6 billion as of March 30, 2013," noted a representative from the investment firm. "NCUA had the market value at $19.1 billion as of Dec. 31, 2102. The trust that holds all of the assets also has $1 billion in cash. The outstanding balance of the [NCUA guaranteed notes] at year-end was $21.16 billion. Therefore, NCUA is saying they are under-collateralized by $1 billion and we indicate they are over-collateralized by $1 billion. It seems to me that future assessments are not warranted."
