ALEXANDRIA, Va. -- NCUA yesterday predicted more losses for both corporate and natural person credit unions, meaning additional charges ahead to replenish reserves for the National CU Share Insurance Fund.
Losses projected for the newly created Corporate CU Stabilization Fund were increased by $354 million alone in September, to $5.3 billion, based on new information on corporate investments, according to Mary Ann Woodson, chief financial officer for the agency.
In addition, the number of troubled credit unions, those rated CAMEL 4 or 5, as well as those on the cusp, rated CAMEL, 3, have grown substantially since the first of the year, indicating more losses can be expected, Woodson told the NCUA Board in her monthly review of the NCUSIF.
The number of CAMELs 3, 4 and 5 grew from 154 with a total of $60 billion at the start of the year, to 252 and $100 billion at Sept. 30.
Through the first nine months of the year there have been 21 credit union failures, with the size of the failures growing. Those failures have cost $95 to resolve so far, but NCUA has set aside another $175.1 million for specific problems, and another $345.7 million for non-specific problems.
The problems caused NCUA last month to assess credit unions a $1.1 billion premium to replenish reserves for the fund. The invoice for the premium is expected to be mailed to credit unions in mid-November and will be due back at NCUA by mid-December, according to Woodson.
NCUA Chairman Deborah Matz told members of Congress last month credit unions can expect additional charges in 2010 and 2011, as well.
Earlier in the week, NCUA Board member Gigi Hyland told attendees to the annual American Institute of CPA's credit union meeting that credit unions could be seeing another premium next year of from 15 basis points to 30 bps, or as much as $2 billion.
