ALEXANDRIA, Va. – NCUA on Thursday said it believes it has more than enough reserves in the National CU Share Insurance Fund and therefore moved $278.6 million from the NCUSIF to the Temporary Corporate CU Stabilization Fund, which will lower this year’s corporate assessment.
NCUA, which tapped credit unions for $1.9 billion in last year’s corporate assessment, had projected this year’s charge would be approximately $700 million, before the transfer.
The transfer will still leave the NCUSIF with a reserve ratio of 1.30% (dollars reserved per $100 of insured deposits), which is around the level desired by the NCUA Board.
The Federal CU Act requires NCUA to transfer any NCUSIF equity above the normal operating level of 1.30% at year end as long as the Stabilization Fund has outstanding borrowings from the Treasury – and the fund continues to have $3.5 billion in outstanding borrowings from the Treasury.
NAFCU President Fred Becker said he was pleased with the transfer but said he thinks NCUA should transfer even more because he believes the NCUSIF is still “over-reserved.” “In fact, they have more than enough reserves for the fund,” Becker told Credit Union Journal yesterday. “The very issue is they are not being as aggressive as they could be. They could transfer more from the fund.”
So far, NCUA has assessed federally insured credit unions a total of $3.3 billion over the past three years to pay for the corporate meltdown.
