ALEXANDRIA, Va. – NAFCU called on NCUA to use more of the National CU Share Insurance Fund’s reserves before assessing federally insured credit unions more charges for the corporate credit union bailout and other credit union failures next year.
In a letter to NCUA Chairman Deborah Matz yesterday, NAFCU President Fred Becker acknowledged the growing costs of credit union problems and asked that NCUA dig deeper into the reserves for the National CU Share Insurance Fund to pay for some of the charges before collecting additional assessments from credit unions.
NCUA officials last week said growing losses n both corporate and natural person credit unions could force the agency to charge additional assessments of as much as $3 billion next year. That comes on top of $1.1 billion in special charges assessed this year.
NAFCU’s Becker reminded Matz that, though the NCUA Board prefers to maintain a reserve level of 1.3 (dollars reserved per $100 of insured deposits) for the NCUSIF, it can legally maintain a lower reserve.
In addition, under recently passed legislation, NCUA can spread a rebuilding of reserves out for as long as eight years. That legislation, noted Becker, would allow the reserves for the NCUSIF to fall as low as 1% before NCUA would be required to replenish it.
