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NCUSIF report final debt collection rule from NCUA
ALEXANDRIA, Va. (2/22/08)—During a brief open board meeting Thursday, the National Credit Union Administration (NCUA) approved its quarterly share insurance fund report and a final rule on collection procedures for debts owed to the agency by its employees. In its quarterly National Credit Union Share Insurance Fund (NCUSIF) report, the NCUA reported its highest loss expense in the history of the fund for December 2007. Staff said the high expense was anticipated because of losses by a few large credit unions. As a result of this and deteriorating market conditions, the NCUA said it shifted to a more conservative methodology to manage reserves. Prior to her report on the NCUSIF, the three-member NCUA board welcomed the agency’s new chief financial officer, Mary Ann Woodson. Woodson reported on the Fund's equity ratio. The amount in the Fund in relation to the amount of total federally insured shares, for year-end 2007, is projected to be 1.29%. Under this projection, a dividend would not be paid to federally insured credit unions. A dividend can only be paid when at the end of the calendar year the equity level exceeds the Fund's normal operating level, which is currently set at 1.3%. The NCUSIF report also noted 211 credit unions had CAMEL ratings of 4 or 5 as of December 2007. Regarding the debt collection rule covers all present and former NCUA employees. It sets out the steps for collecting debts owed to the federal government, through such means as administration offset or, for current employees, salary offset. While this situation has occurred only rarely at NCUA, the rule is required by the Debt Collection Improvement Act of 1996 and follows standards that have been previously issued by the Department of Justice and the Department of the Treasury.
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