ALEXANDRIA, Va. (8/1/14)--Credit unions will not face an assessment this year for the Corporate Credit Union Stabilization Fund, the National Credit Union Administration confirmed at its board meeting Thursday. Future assessments are unlikely as well.
Larry Fazio, NCUA director of examination and insurance, said the improvements to the fund are due to the performance of the NCUA Guaranteed Notes (NGN) program and recent corporate credit union litigation settlements totaling more than $1.75 billion.
Net projected remaining assessments in the Stabilization Fund range from -$2 billion to -$0.6 billion. NCUA Chair Debbie Matz said the double negative projected assessment range is "positive news" for credit unions.
But Fazio emphasized that the negative assessment range does not mean there are funds available to provide refunds to credit unions now, as the improving values of legacy assets are used to secure the NGN. The NCUA also owes $2.6 billion borrowed from the U.S. Treasury. The agency did indicate that some rebate to federally insured credit unions in 2021 might be possible, but only after all obligations, including those to Treasury, have been met.
The board also provided a quarterly update on the status of the National Credit Union Share Insurance Fund (NCUSIF). The fund has an equity rate of 1.29% as of June 30, and reserves are approximately $176.1 million, $8.1 million of which are for specific credit unions.
According to the NCUA, there are 295 CAMEL 4 and 5 credit unions, representing 1.46% of insured shares, or approximately $13.2 billion. The number of CAMEL 4 and 5 credit unions is on the decline. There are 1,466 CAMEL 3 credit unions, representing 10.46% of insured shares, or $94.5 billion. Combined, insured shares in CAMEL 3, 4, and 5 credit unions represent only 11.92% of total insured shares.
There have been eight credit union failures so far this year. In 2013 there were 17 total failures.
The NCUA board also approved a community charter expansion for Call FCU, based in Richmond, Va. with $360 million in assets. The credit union was chartered in 1962 to serve the employees of Philip Morris Tobacco Company, also based in Richmond, and converted to a community charter in July 2010, serving approximately 100 select groups and two underserved areas.
The expansion of the charter means approximately 1.3 million people are now in Call FCU's field of membership.
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