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2011 NCUSIF premium not a definite (02/21/2011)
ALEXANDRIA, Va. (2/22/11)—The National Credit Union Administration said it may not need to assess a National Credit Union Share Insurance Fund (NCUSIF) premium on credit unions in 2011. Credit Union National Association (CUNA) Chief Economist Bill Hampel has predicted that the 2011 NCUSIF premium would total between 5 and 10 basis points (bp). The NCUA’s Office of Examination and Insurance Director Melinda Love during a Thursday NCUA virtual town hall said that although the agency must ensure that it can still handle its cash management needs, it is delaying the NCUSIF assessment for as long as it possibly can. The NCUSIF premium, if assessed, will be released in the fall, she added. The NCUA last week reported that the NCUSIF’s reserve balance stood at over $1.26 billion. (See related story: The agency transferred $54.8 million from the NCUSIF to its reserves as an insurance loss expense late last year. The NCUA will assess a Temporary Corporate Credit Union Stabilization Fund (TCCUSF) premium this summer, Love said. Hampel said that credit unions would be charged around 9 bp in assessments to cover the cost of corporate stabilization. The NCUA has predicted a 2011 TCCUSF assessment of 20 to 25 bp. NCUA Deputy Executive Director Larry Fazio during the town hall added that the agency would need to charge between $7 billion and $9 billion in future assessments to stabilize the corporates. Fazio said that he could not predict how long the NCUA would need to continue charging TCCUSF assessments. The NCUA late last year proposed implementing "voluntary" TCCUSF assessments to privately insured credit unions and non-credit unions, such as credit union leagues, that are members of a corporate. CUNA urged the NCUA to further consider this proposal before it moves forward. The NCUA was recently given the authority to make TCCUSF payments without borrowing from the U.S. Treasury.


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