ALEXANDRIA, Va. – The NCUA Board is widely expected to assess its biggest ever charge to federally insured credit unions – $2 billion for this year’s share of the corporate resolution program – at a special summer-ending meeting Monday afternoon.
The assessment, amounting to a 25 basis points charge, will make more than $3.3 billion raised from credit unions for the corporate meltdown, along with $2 billion for premiums to recapitalize the National CU Share Insurance Fund since September 2009.
“They said it’s $2 billion. That’s about 25 basis points of credit union shares,” said Bill Hampel, chief economist for CUNA. “It’s what they said they would do.”
If NCUA does approve a $2 billion assessment it will be the largest for credit unions, topping last year’s $1 billion and 2009’s $337 million corporate charges, and NCUSIF premiums of about $1 billion in each of the last two years.
“What that means,” Hampel told Credit Union Journal yesterday, “is that [average credit union] ROA this year, which was running around 85 to 90 basis points, will be knocked down to the neighborhood of 70 basis points.”
He said NCUA has expressed plans to charge another 12 basis points, or about $1 billion, in 2012, and about $1 billion every year until the end of the corporate program.
The $3.3 billion NCUA corporate assessments, when added to more than $6 billion of credit union capital erased by the corporate failures, brings to almost $10 million the cost of the corporate meltdown.
