For the second straight year, the credit union deposit insurance fund will return $103 million to its members, the National Credit Union Administration announced Wednesday.

For the fifth consecutive year, credit unions will not pay any insurance premiums.

Declaring 1996 as the fund's best year, the NCUA board said it is returning to credit unions the bulk of $140 million in interest income earned this year because no losses are anticipated.

Credit unions pay 1% of their deposits into the National Credit Union Share Insurance Fund. The fund currently has $1.32 for every $100 in deposits held by credit unions.

NCUA Chief Financial Officer Dennis Winans said the fund's $88 million in reserves will be adequate to cover any losses, and that favorable trends anticipated for next year don't justify imposing $231 million in premiums.

Of the 11,000 insured credit unions, NCUA has identified 287 "problem" institutions. While their collective deposits total roughly $2 billion, the high-risk members make up less than 1% of the fund's liabilities.

"We had a good year, and the credit unions can do a lot more with these waived (premium) funds," Mr. Winans said. - John Shea, Medill News Service

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