ALEXANDRIA, Va. — The NCUA Board this morning began a hurried bid to stop credit unions from converting to private deposit insurance in order to escape assessments for the impending NCUSIF premium.
The Board issued for a quick 30-day comment period a proposed rule that would make all federally insured credit unions responsible for replenishing their 1% National CU Share Insurance Fund deposit the moment NCUA announced publicly the need to do so.
The rule will also make all credit unions liable for any premiums assessed by the NCUSIF if they are insured by the NCUSIF in the same calendar year.
NCUA is expected to assess an NCUSIF premium of about $1 billion later this year.
The rule would not apply to the newly created Corporate CU Stabilization Fund which is managing the $6 billion corporate bailout and will also be funded by federally insured credit unions.
The proposed rule comes as several credit unions are exploring whether they could escape this year's NCUSIF charges--which are assessed all federally insured credit unions--if they convert to private insurance.
"For the first time this crisis has brought to our attention that our regulations did not contemplate this situation," said NCUA Board member Gigi Hyland.
