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News Now

Washington
NEW NCUA wont launch corporate assessment prepay plan
ALEXANDRIA, Va. (UPDATE 8/2/11, 2:40 p.m. ET)—The proposed prepayment program for corporate credit union stabilization assessments failed to attract the required $500 million in pledges that the National Credit Union Administration (NCUA) set as the requirement to launch the plan. However, the agency’s chairman said the board is open to reconsidering the issue in 2012. Credit Union National Association (CUNA) President/CEO Bill Cheney said of the news, “It’s unfortunate that the minimum size of the program could not have been larger, as CUNA had recommended, so that the prepayment would have provided for a greater decrease in this year’s assessment.” He cited, by way of example, if the minimum size had been set at $1 billion, this year's assessment could have been reduced to about 12 basis points. “Had that been the case, credit unions may well have found that the program would be more attractive, in which case they might have committed substantially more to the program,” Cheney said Tuesday. Credit unions that wished to take part in the assessment prepayment plan had to notify the agency of their intent by last Friday. The NCUA said today that of the nation’s nearly 7,300 federally insured credit unions, 799 pledged $369.9 million to voluntarily prepay assessments. Having missed the $500 million trigger that would have launched the program, the NCUA noted it will not debit any voluntarily pledged amount from any credit union. NCUA Chairman Debbie Matz commented, “NCUA responded to credit union requests and created a viable alternative to offer prepayments as a way to manage assessments in the long run. She added, “While the pledges fell short of meeting the required threshold to move forward, the NCUA board remains open, perhaps, to reconsidering this issue next year.”


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