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Washington
Matz NCUSIF operating level should not drop far below 1.2
ALEXANDRIA, Va. (7/23/10)—National Credit Union Administration (NCUA) Chairman Debbie Matz on Thursday said that she does not support reducing the normal operating level of the National Credit Union Share Insurance Fund (NCUSIF) more than a few basis points below 1.2%. The Credit Union National Association (CUNA) does not support setting the normal operating level below 1.2% but has recommended that the NCUA set the operating level below 1.3%. Setting the operating level below 1.2% would tip the equity level too far towards 1%, CUNA has said. Reducing the amount held in the fund to below 1% of insured shares would trigger replenishment. The NCUA expects to levy an assessment to rebuild the equity level of the NCUSIF, the amount in the fund over the 1% of insured shares, later this year. CUNA Chief Economist Bill Hampel has estimated that this assessment could be somewhere between five and 10 basis points (bp), bringing the total amount assessed by the NCUA, including the 0.134% of insured shares assessed this month for the corporate credit union stabilization program, this year to between 18 and 23 bp of insured shares. Matz on Thursday said that credit union losses will be a “key factor” in determining the assessments required for the NCUSIF. “If credit union losses are lower, credit union assessments will be lower,” Matz added. For the NCUA release, use the resource link.
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