Friday, November 19, 2010 12:18:51 PM
ALEXANDRIA, Va. - At Thursday's open board meeting, NCUA projected total dual assessments of 20-35 bp for 2011. Staff estimated that growing losses at both corporate and natural person credit unions could require an NCUSIF assessment ranging from zero to 10 bp and a Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessment of 20-25 bp, bringing the estimated total assessment to 20 to 35 bp. These assessments could collect up to $2.7 billion in funds.
NCUA Chairman Debbie Matz noted that the current basis point projection is only an estimate, and could shift due to increases or decreases in the number of credit union failures or CAMEL Code troubled credit unions.
However, CUNA President/CEO Bill Cheney said, CUNA is particularly concerned with what appears to be "frontloading" of 20- 25 bp.
"The whole purpose of the corporate stabilization fund, as enacted by Congress, was to spread the expense to credit unions over an extended period of time. Further, the 'legacy assets' resolution plan, unveiled by NCUA in September, had as a central tenet a repayment by credit unions spread over 11 years, divided somewhat equally over that period," Cheney said.
While the proposed NCUSIF zero to 10 basis points (bp) "is right within the range" that was expected, Cheney said that CUNA is "troubled with the projected corporate stabilization assessment."
For the complete results of NCUA's Board meeting, click here.