KINGSTON, N.Y.-Though he doesn't like it, Bill Spearman, president/CEO of Mid-Hudson Valley FCU here, is confident that his $2.5-billion institution will be able to pay the NCUA assessment without incident.
"We budgeted 20 basis points in total; we didn't break it down as to what would be stabilization and what would be insurance fund," he said. "We'll fit in just what we've budgeted for so there will be no additional expense. We fully have accounted for it, not that we like it, and our ROA certainly can support it."
Spearman was not surprised by the 13.4 BP assessment the regulator announced two weeks ago, though the timing was a bit unexpected. NCUA was forced to levy the corporate assessment now because it has to repay the Treasury Department for a $1-billion note before it borrows another $800 million to stabilize the corporate system and Spearman expects more of the same for years to come. "I think this is going to be with us for awhile. I don't know what if anything the NCUA can do with these legacy assets."
With a handful large natural person credit unions potentially being pushed to the brink, Spearman believes that the success or failure of those institutions will dictate how much NCUA will assess to replenish the NCUSIF. The solvency of these unnamed institutions could be the difference between five and ten basis points, he predicted.
