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Corporate stabilization fund gets clean 2009 audit
ALEXANDRIA, Va. (7/27/10)—The Temporary Corporate Credit Union Stabilization Fund (TCCUSF) received an unqualified or “clean” audit opinion with no deficiencies noted, according to an National Credit Union Administration (NCUA) announcement Monday. Citing a report from KPMG LLP, the independent firm retained to conduct the audit, the NCUA Chairman Debbie Matz said the audit results represent “an important validation of the soundness of this essential NCUA role.” “In these volatile and uncertain times, it is very positive and reassuring for credit unions that the Stabilization Fund, working in concert with other NCUA funds, has received this clean bill of health on its financial reporting and is well-positioned to safeguard the corporate system,” Matz said. Last month, KPGM also gave the National Credit Union Share Insurance Fund (NCUSIF) a "clean" audit report, with auditors also certifying the "financial accuracy" of the NCUA’s operating fund, its community development revolving loan fund, and its central liquidity facility. In its report on the TCCUSF, KPMG wrote, “(I)n our opinion, the financial statements referred to…present fairly, in all material respects, the financial position (of the fund) as of December 31, 2009, and its net costs, changes in net position, and budgetary resources for the period from May 20, 2009 (inception) to December 31, 2009 in conformity with U.S. generally accepted accounting principles.” The TCCUSF was created in May 2009 by the U.S. Congress to accrue corporate credit union system losses, and over time, to assess the credit union system for the recovery of such expenses. The fund has access to $6 billion in U.S. Treasury borrowing authority, which is shared with the NCUSIF. After reviewing the auditors report, Credit Union National Association Chief Economist Bill Hampel said that while the audited financial statements offer no new information, credit unions can find the fund’s unqualified audit reassuring. The projected total cost of the corporate stabilization effort remains approximately $7.5 billion, of which $1 billion is the previous capital injection into US Central, and $6.5 billion is the accounting cost of guaranteeing all credit union non-capital deposits in corporate credit unions, Hampel said. “These accounting costs are NCUA's estimates of the ultimate actual costs of corporate stabilization. After all is said and done, credit unions will have to pay the actual costs that are eventually incurred as a result of troubled assets held by some corporate credit unions. This year's 13.4 basis point assessment raised $1 billion toward the final cost. In the next three to four years, we'll learn more about what the actual costs will be,” Hampel said. He added that it would not be unlikely to see assessments in the neighborhood of 13 basis points for the next couple of years, followed by adjustments, either increases or decreases, in the last few years of the stabilization as actual losses become better known. Use the resource links below for more information.
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