NCUA Plans 12.4 Basis Points Charge

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ALEXANDRIA, Va. - The NCUA Boad this morning is expected to approve a premium assessment for the National CU Share Insurance Fund of 12.4 basis points, or $933 million, adding to the growing woes of federally insured credit unions.

The special assessment comes three months after NCUA charged credit unions a 13.4 bp premium, or $1.1 billion, to pay for the corporate credit union bailout, and a year after the agency charged a $1.1 billion assessment for the two charges, making a total of $3.1 billion in special charges over two years.

Growing losses accrued by the NCUSIF and the corporate system are projected to necessitate additional assessments next year and into the forseeable future, as well.

The latest assessment is expected to drive as many as 392 credit unions into the red for 2010, and some 60 credit unions into undercapitalized territory.

The latest charge comes as the reserve ratio for the NCUSIF declined to just 1.176 (dollars reserved per $100 of insured deposits) at August 31, triggering a requirmeent that NCUA furnish a plan to Congress on restoring the reserve ratio above 1.2%. The special assessment will raise the ratio to a projected 1.3%.

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