ALEXANDRIA, Va. – NCUA said yesterday it formally transferred the entire $6 billion corporate bailout program, including the emergency assistance for U.S. Central FCU and WesCorp FCU and responsibility for the Temporary Share Guarantee and Temporary Corporate CU Liquidity Guarantee programs from the National CU Share Insurance Fund to the newly formed Corporate CU Stabilization Fund.
The maneuver will allow the NCUSIF to wipe out the $5.9 billion charge to credit unions for the corporate bailout and for credit unions to restore the 0.69% impairment of their 1% NCUSIF deposit. As a result, natural person credit unions will be able to reflect a fully restored 1% NCUSIF deposit on their June 30th Call Reports.
Instead, the $5.9 billion charges will now be assessed credit union over the next seven years through the Corporate Stabilization Fund, with one-seventh of it, or 15 basis points, to be charged this year.
Separately, NCUA said it expects the NCUSIF to assess a 15 bp premium to pay for troubles among natural person credit unions and for the dilution of the NCUSIF reserves to the increase in deposit insurance coverage to $250,000 per account.
Under the transfer of the corporate bailout, the Corporate Stabilization Fund has paid the NCUSIF $1 billion to assume the emergency note issued to U.S. Central, thereby releasing the NCUSIF from any reserve requirements related to the capital note.
