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NCUA says it will try to avoid insurance premiums
Click to view larger image NCUA Chief Financial Officer Mary Ann Woodson readies an overhead presentation to the NCUA Board yesterday. (Photo provided by CUNA)
ALEXANDRIA, Va. (7/25/08)--During National Credit Union Administration (NCUA) Chairman JoAnn Johnson’s final open board meeting yesterday, staff told the board the agency was trying to avoid the need for share insurance premiums this year, but that staff would reevaluate the situation by the end of the year. Dave Marquis, NCUA director of the Office of Examination and Insurance, and Mary Ann Woodson, NCUA chief financial officer, presented the report on the National Credit Union Share Insurance Fund (NCUSIF). There currently are 245 CAMEL 4 and 5 credit unions, up from 211 at the end of 2007. These credit unions account for only 1.37% of total insured shares. The NCUSIF’s equity level currently stands at 1.24% and is expected to be at 1.28% at the end of this year, said Marquis.
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While a dividend is not anticipated, Marquis noted that the economy is currently “unfavorable” and that avoiding a premium is therefore their goal. He explained to the board that credit unions had increased average net worth up to 11.4%. This means--even though the NCUSIF remains in the “zone” where a discretionary insurance premium is possible--NCUA staff is optimistic about the overall health of the credit union system. Agency staff did note, however, that there are currently 15 large “problem” credit unions--those rated CAMEL 4 or 5. That number is up from 12 in 2007.
Click to view larger image During yesterday's monthly board meeting, NCUA director of the Office of Examination and Insurance Dave Marquis, left, and CFO Mary Ann Woodson address the possibility of insurance premiums this year. (Photo provided by CUNA)
Johnson asked NCUA staff to explain why NCUSIF losses so far this year had been higher than originally projected. Woodson explained that this year’s losses so far this year had been more than two standard deviations higher than the ten-year average and that the higher than projected loss expense level primarily resulted from a single credit union. Use the links below to access the NCUSIF reports from NCUA.
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