ALEXANDRIA, Va. — In a move that increases the likelihod of another special assessment for credit unions later this year, NCUA reported this morning that the reserve level for the National CU Share Insurance Fund fell more last month to below levels they had projected for year-end.
The reserve level, which NCUA had hoped would be replenished to 1.30% (dollar reserved per $100 of insured deposits) after the $1.1 billion November special assessment, actually declined from 1.27 at the end of November to 1.24 at Dec. 31, according to Mary Ann Woodson, chief financial officer for NCUA.
Woodson told the NCUA Board this morning that things have deteriorated since September, when the NCUA Board voted the $1.1 billion assessment. "Since that time we have had an additional $270 million of (credit union) losses," she said.
In December alone, the NCUA accrued another $78.4 million in losses, bringing losses to the share insurance fund to $625.1 million for 2009, marking the fund's worst year ever.
But another component will also contribute to the need for another assessment this year. That is that credit union deposits, projected in September to grow by 8.5% for 2009, actually grew by about 9.5% for the year, dilluting the reserves even more, explained Woodson.
For 2009 there were 28 credit union failures, up from 18 in 2008 and the most since 2000 when there were 29. Last year's failures included 16 involuntary liquidations and 10 purchase and assumption and 12 assisted mergers that cost NCUA $124.4 million in assistance.
In addition, troubled credit unions, those rated either CAMEL 4 or CAMEL 5, increased by 80 in 2009 to 351, while CAMEL 3s, those considered "stressed," grew by 134 to a total of 1,668 at year-end.
