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Washington
Insurance premiums v. deposit recapitalizations NCUA
ALEXANDRIA, Va (7/17/09)—Interested parties have 30 days to comment on a National Credit Union Administration (NCUA) plan to clarify how insurance premiums and deposit recapitalizations are calculated for only a portion of a year when a credit union either enters or departs the National Credit Union Share Insurance Fund (NCUSIF) in a year with an assessment. NCUA board member Gigi Hyland said at the agency’s Thursday open board meeting that this new rule is necessary to clarify ambiguities in the current regulations that came to light because of the NCUSIF expenses related to the corporates. The rule could apply to such situations as conversions from NCUSIF to private insurance; conversions from private insurance to NCUSIF insurance; and conversions to a federal thrift where the conversion is from NCUSIF insurance to FDIC insurance. Those scenarios could also include mergers of one type of charter with another. The proposal includes specific calculations for these types of assessments and distributions. The proposal would amend the definition of insured shares to include shares that would have been insured by the NCUSIF if the institution had been federally insured on the date of measurement. In addition, the proposal would add a definition of premium/distribution ratio and modified premium/distribution ratio to reflect a fraction of a year that a credit union was insured if it enters or departs the NCUSIF. An additional clarifications to distinguish premium assessments and assessments to replenish the 1% deposit is also in the plan. In response to a question from the board, NCUA staff clarified that the new regulation as proposed would not apply to TCCUSF payments.
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