WASHINGTON — A national survey of CUs indicates support for using Treasury funds as a back up for the National CU Share Insurance Fund, according to CUNA.
Results of the survey showed more than 55% of those responding supported employing a Treasury back-up for the NCUSIF as it is tapped to pay for NCUA's Corporate Stabilization Program.
Responders agreed with the statement: "CUNA should advocate for a set-aside of TARP funds to backstop the NCUA's guarantee of deposits by natural person credit unions in corporate credit unions, only to be accessed if at least $500 million of loss from corporates is first absorbed by the NCUSIF." Thirty-six percent disagreed with the statement; 9% were neutral.
The results for the "NCUSIF back-up" question reflected views expressed by respondents favoring a Treasury back-stop as one tool to assist in mitigating costs for resolving corporate credit union issues. However, respondents largely viewed using Treasury help for natural person credit unions unfavorably.
CUs appear unwilling to completely rule out use of Treasury help in all cases-56% indicated "disagreement" when asked to rate the notion that "CUNA should not advocate for TARP funds under any circumstances and in any conditions." However, just 34% indicated "agreement."
The survey was sent to more than 5,000 CUs. About 1,600 responded to the survey. CUNA's Board of Directors voted to keep all options open in finding alternatives for mitigating costs of CUs of the NCUA CSP. It is possible that no Treasury funds would ever be tapped, in that other alternatives identified by CUNA would further mitigate costs for CUs. Among those alternatives:
- Use the CLF as a source of funding, for loans or capital support.
- Improve the accounting treatment of assets that are other-than-temporarily-impaired.
- Pursue accounting issues that could allow the NCUSIF to recognize its insurance costs over time.
- Obtain long-term deposits from CUs into corporates.
- Expand NCUA's Credit Union System Investment Program to make it more attractive to CUs.
