NCUA Discusses SAFE Act, Status of Insurance Fund at May Meeting
May 21, 2010 The National Credit Union Administration (NCUA) Board discussed the expected final rule that implements the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) and approved the extension of the Temporary Corporate Credit Union Liquidity Guarantee Program at their meeting May 20 meeting. NCUA's Chief Financial Officer also provided the monthly report on the status of the National Credit Union Share Insurance Fund (NCUSIF) during the meeting.
The S.A.F.E. Act requires all states to have a system in place to license and register loan originators using the Nationwide Mortgage Licensing System and Registry (Registry). Under the SAFE Act, credit union employees that are involved in originating mortgage loans, including home equity loans, will be required to register with a new nationwide mortgage registry within six months after the registering procedures are established. NCUA's regulation contains requirements that will allow non-federally insured credit unions to participate in the registry as well. The system is expected to be live sometime in early 2011.
In the NCUSIF report, it was reported the the equity ratio was 1.24 percent for April 2010, and that problem credit unions (CAMEL 4/5) had increased from 349 in March to 357 in April, representing 5.94 percent in assets. NCUA also reported that 12 credit unions had failed thus far in 2010; 28 credit unions failed in 2009.
Following the Insurance Fund's financial report, NCUA's Melinda Love and Larry Fazio described the complex analysis involved in determining assessments and payments for the National Credit Union Share Insurance Fund and the Temporary Corporate Credit Union Stabilization Fund. In an effort to promote transparency, Board member Hyland asked that this information be made available to the public, if possible. NCUSIF assessments are traditionally done in September. NCUA is still expecting a NCUSIF assessment in the range of 15-40 basis points for 2010.
To view the materials from the May meeting for more information, follow this link.