Final Rule Summary:  NCUSIF Equity Distributions

Prepared by NASCUS Legislative & Regulatory Affairs Department
April 2018

NCUA has promulgated a final rule amending the regulations for calculating credit unions’ pro rata share of a declared equity distribution from the National Credit Union Share Insurance Fund (NCUSIF). NCUA also finalized temporary provisions governing NCUSIF equity distributions related to the merger of the NCUSIF and the Temporary Corporate Credit Union Stabilization Fund (TCCUSF).

The final rule may be read in its entirety here. The rule was effective March 26, 2018. Part 741.13 of the rule is effective from March 26, 2018 until December 31, 2022.


The Federal Credit Union Act (FCUA) requires NCUA to make a pro rata equity distribution from the NCUSIF to all federally insured credit unions (FICUs) at the end of each year provided the following conditions are met:

  1. The NCUSIF has no outstanding loans from the Treasury Department
  2. The NCUSIF’s equity ratio exceeds the normal operating level set by the NCUA Board (currently 1.39%)
  3. The NCUSIF’s available assets ratio exceeds 1 percent

NCUA’s final rule establishes two methodologies to govern future NCUSIF distributions.

One methodology governs future distributions until December 31, 2022. This methodology accounts for the assessments credit unions paid into the TCCUSF, and reflects NCUA’s determination that any NCUSIF distributions between now and the end of 2022 are related to the merger of the insurance fund with the TCCUSF and represents a rebate to insured credit unions of excess stabilization fund assessments.

The other methodology will govern distributions declared after December 31, 2022.

1. Four-Quarter Average Method

For NCUSIF equity distributions, NCUA is adopting a four-quarter average approach that relies on the use of quarterly Call Report data to determine an eligible financial institution’s pro rata share of the distribution. Pursuant to this approach, a credit union must have filed at least one Call Report for a reporting quarter in the year for which a distribution was declared to be eligible for a share.

With respect to mergers, the new NCUSIF distribution rules will combine the insured shares of the merging credit unions IF the discontinuing credit union filed a call report for at least one of the cycles in the year for which the distribution is declared. NCUA will also use this approach for purchases and assumption situations where a continuing credit union acquires all of the insured shares of another credit union.

NCUA will utilize a four-quarter look-back period to determine the four-quarter average of insured shares.

2. Termination of NCUSIF Insurance

Section 741.4(e)(4)(i)(C) of the final rule will retain the right of credit unions that terminate NCUSIF share insurance during the year for which a dividend is declared to receive a prorated share of the distribution. The credit union terminating share insurance must have filed at least one Call Report for a reporting period in which the distribution is declared.

NCUA will calculate the prorated distribution of a credit union that terminates NCUSIF coverage by applying the general four-quarter average approach set out in § 741.4(e). For reporting periods where the credit union did not maintain NCUSIF coverage, it will be treated as having no insured shares in that period.

NCUA notes that it will continue to study this issue to determine whether a credit union that terminates NCUSIF coverage is entitled to any prorated distribution.

3. Section 741.13 NCUSIF Equity Distributions Related to the CSRP

Between now and the end of 2022, NCUA will presume that any distributions from the NCUSIF are related to the Corporate System Resolution Program (CSRP) and the TCCUSF. In order to calculate distributions from the NCUSIF to insured credit unions, NCUA will adopt a modified version of the four-quarter average method that will include five separate look-back periods tied directly to the beginning of the CSRP and corresponding to each calendar year for which the Board may declare an equity distribution related to the CSRP.

Year Distribution Announced

Look Back Period


36-quarter lookback


40-quarter lookback


44 quarter lookback


48-quarter lookback


52-quarter lookback

As with the four-quarter average approach, under this extended look back approach, an eligible credit union must file at least one quarterly Call Report for a reporting period in the calendar year for which the Board declares an equity distribution to receive a pro rata share of that distribution. Otherwise, that credit union will not receive an equity distribution for that calendar year nor will its insured shares be used to calculate the aggregate average amount of insured shares used to determine each eligible financial institution’s pro rata share of the distribution.

4. Calculation of Pro Rata Share of NCUSIF Distribution.

To calculate a credit union’s pro rata share of an NCUSIF equity distribution, NCUA will divide the dollar amount of the declared NCUSIF equity distribution by the aggregate average amount of insured shares for that calendar year and then multiplying by the credit union’s average amount of insured shares.

5. Rules for Newly Chartered Credit Unions and Conversion of Insurance

NCUA is relocating the provisions related to new charters within from §741.4(g) to new §741.4(e) and clarifying that a new charter may both receive an equity distribution unless it has both fully funded its capitalization deposit and filed at least one report during the reporting periods for the year in which the distribution was announced.

NCUA is making other technical changes to align the rules for the pro rata share of a credit union converting to NCUSIF insurance to reflect the four-quarter look back rather than the previous months of coverage method.

NCUA will also replace existing “Appendix A” to §741 with examples and Frequently Asked Questions.