Prepared For Worse, Truliant In good Shape
WINSTON-SALEM, N.C.-NCUA's $1 billion assessment to shore up the corporate credit union system shouldn't hurt the bottom line at Truliant FCU here.
"We didn't really have a preconception of what the corporate stabilization amount would be," said Marcus Schaefer, president/CEO of the $1.1-billion institution. "We targeted 25 basis points but were prepared to do 40 without falling outside of our budget."
With the 13.4 basis point assessment for the corporates already announced, now the question becomes what the regulator will assess for the share insurance fund. NCUA levied a 10 basis point assessment to start to replenish the NCUSIF.
"We think anywhere from 20 to 25 BPs [in total] is still a pretty good guess, unless there is some significant new losses amongst natural-person CUs," said Schaefer, adding that the remaining budgetary "wild cards" are the losses some natural-person CUs face this year and NCUA's decision to what level, and how quickly, it wants to boost the share insurance fund.
Schaefer fully expects the assessments to continue for a number of years and believes NCUA has "practiced sound management of credit union resources" in how it has gone about the process, especially given the corporate investment losses. "It's reasonable and appropriate to spread those losses over the next seven years and realize the losses as they occur," he said.