NCUAs Prepaid Corporate Plan Falls Short
ALEXANDRIA, Va. – NCUA announced this afternoon it failed to obtain the self-imposed minimum commitments of $500 million for its voluntary prepaid corporate assessments plan, thereby cancelling the program.
The failure of the voluntary program means credit unions will face higher assessments for the corporate program later this year. NCUA said earlier the voluntary payments could reduce this year's expected corporate assessments from around 25 basis points to as low as 15 bps.
NCUA said it only received commitments for the voluntary payments fo $370 million from 779 credit unions.
Under the program, credit unions were invited to make voluntary no-interest payments to NCUA to help drfay the long-term costs of the corporate prorgam, which would be applied to their future corporate assessments.
The NCUA Board had determined that the program would not go forward if less than $500 million in pledges were received. Therefore, NCUA will not debit any voluntarily pledged amount from any credit union. “NCUA responded to credit union requests and created a viable alternative to offer prepayments as a way to manage assessments in the long run,” said NCUA Chairman Debbie Matz. “While the pledges fell short of meeting the required threshold to move forward, the NCUA Board remains open, perhaps, to reconsidering this issue next year.”