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September 24, 2009 - Federally insured credit unions will soon see bills for assessments for 0.15 percent of insured shares, the first of a series of premiums that may be necessary for the next couple of years, said the National Credit Union Administration (NCUA) at its September Board meeting.
The 0.15 percent is a combination of two assessments: 1) 0.1027 percent of insured assets to return the National Credit Union Share Insurance Fund (NCUSIF) equity ratio to 1.30 percent, as required by the Federal Credit Union Act; and 2) 0.0473 percent of insured shares to repay a portion of the Temporary Corporate Credit Union Stabilization Fund and to repay all accrued interest on June 30, 2010.
NCUA staff explained that the agency performed a number of stress tests based on economic forecasts and other factors and determined that while they could’ve assessed a smaller premium, it wouldn’t have prepared the NCUSIF for projected losses in 2010. At her first meeting as Chairman, Debbie Matz explained this action “as proactive in planning for next year’s projected losses.”
NCUA stated at the meeting that additional premiums are likely, and that the agency will give credit unions a projected range of amounts in November for them to use in budgetary planning. To view more information on the premium assessment, click here.
Also at the September 24 meeting, the NCUA Board approved changes to the Central Liquidity Facility (CLF) investment and retention policies. The Board action revised CLF investment policy to incorporate a recent change regarding how the CLF invests its capital stock proceeds from U.S. Central Federal Corporate Credit Union to U.S. Treasury Securities. Second, the CLF will now be able to resume building its capital through ongoing quarterly retention of earnings in response to a recent increase in expenses due to higher CLF planned staff levels.
Lastly, the NCUA Board approved technical changes to its Temporary Corporate Credit Union Liquidity Guarantee Program agreements.
To view all NCUA Board Action Memoranda from this meeting, follow this link.
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