ALEXANDRIA, Va. (11/18/10)—Saying it was “taking a page” from the Federal Deposit Insurance Corp.’s (FDIC's) recent action plan to increase available tools to resolve large, complex financial institutions, the National Credit Union Administration (NCUA) Wednesday announced its own Loss Share Program. The agency said it would begin immediately to develop the pilot program, and that it anticipates that losses to the National Credit Union Share Insurance Fund (NCUSIF) will be reduced through a program that, like the FDIC’s, gives agency support to an acquiring institution’s purchase and service of pools of loans. The FDIC reimburses the acquiring financial institution a percentage of any loan losses. “This pilot represents an innovative and sensible effort by NCUA to minimize losses to the NCUSIF and foster a lower-cost, market-based solution to the problems associated wth failures,” noted NCUA Chairman Debbie Matz in a release. “By drawing on the experiences of FDIC, and tailoring the program to the unique nature of credit unions and the distinct structure of the NCUSIF, I am confident that the pilot program will be a worthwhile initiative. I look forward to carefully evaluating the results,” Matz added. The NCUA said loss share agreements could potentially defer NCUSIF losses or even reduce losses if loan value increases. “The FDIC experience has also shown that loss sharing can add clarity about risk in an acquiring institution‘s loan portfolio,” the release said. As part of the NCUA pilot, the agency will gauge the cost benefits of overseeing loss-share agreements that have eight- to 10-year time horizons.