Nov. 17, 2022: NCUA Board Meeting Summary
November 17, 2022 — There was one item on the NCUA Board meeting agenda, a briefing on the Quarterly Share Insurance Fund report. The fund’s equity ratio as of June 30, 2022, remains stable at 1.26%, the same as from December 31, 2021. Additionally, the projected ratio of the Normal Operating Level is 1.30%.
Related Reading: NCUA Publication Share Insurance Fund Reports Strong Performance in the Third Quarter
The fund saw an investment income of $73.6 million, $5 million higher than the previous quarter. NCUA Chairman Harper inquired if the increase in the investment income for the quarter was attributable to interest income overall or a reduction in expenses to which it was reported that the fund’s overall net income had been aided by the reduction in corporate asset management expenses as well as rising interest rates.
As part of the briefing, the Board was informed that there was a slight decrease this quarter in the assets in credit unions with a CAMELS rating of a 1 or 2, a slight increase in assets in credit unions with a CAMELS 3 rating, while assets in CAMELS 4 and 5 credit unions remained the same. The overall number of credit unions also decreased from the previous quarter by 19, down from 4,846. There were 4 credit union failures last quarter, which included 2 involuntary liquidations with purchase and assumptions and 2 assisted mergers to a total of $7 million in losses to the share insurance fund. Of the 4 failures, 3 were attributed to fraud.
At several points in the meeting, the board members addressed the concern of fraud in credit unions, particularly smaller credit unions, and reiterated the importance of onsite examinations to review documents and internal controls. As NCUA considers the 2023/2024 budget, they will be addressing the need for potential increases in travel costs for such examinations. Board Member Hood also stressed the importance of resources and ongoing fraud training and mitigation measures, particularly for smaller credit unions.
Finally, the Board collectively reinforced the need for Congress to take action and codify the Central Liquidity Facility Agent Program to provide much-needed liquidity sources to credit unions.