ALEXANDRIA, Va. – The NCUA Board is expected to vote this morning for a plan that would allow credit unions to pay the costs of the corporate credit union bailout in seven annual installments, instead of all at once.
The plan will enact the recently passed Corporate CU Stabilization Fund, which will borrow $6 billion from the Treasury's Federal Financing Bank to finance the estimated $5.9 billion cost of the bailout, then assess credit unions annual premiums over seven years to recover the costs.
This will allow thousands of credit unions that took a charge for the bailout either for last year or in the first quarter of this year to reverse most of those charges and spread them over the next seven years.
After that, the bailout fund is scheduled to be paid off and merged into the National CU Share Insurance Fund.
The funds will be used to resolve the failures at U.S. Central FCU and WesCorp FCU and potentially other corporate credit unions that require federal assistance.
