ALEXANDRIA, Va. (7/12/11)--National Credit Union Association (NCUA)Chairman Debbie Matz and some of her senior staff fielded questions from credit unions regarding the agency’s plan to allow credit unions to prepay some of their Temporary Corporate Credit Union Stabilization Fund (TCCUSF)assessments in a webinar Monday. CUNA President/CEO Bill Cheney has encouraged credit unions to consider the extent to which the program will benefit them and the credit union system. Among the questions credit union participants in the webinar raised was why is the program limited to $500 million. Agency staff responded that if the program were substantially larger, the agency would not be able to provide a dollar-for-dollar reduction in the assessment for this year, as it has committed to do. Or, if there is a larger prepaid assessment this year, there would be much larger assessments in 2013 and 2014, compared to the estimated assessments for those years that already are expected to increase as a result of the $500 million ceiling on the size of the program. Another participant asked why the 2013 and 2014 assessments will be larger under the program than for subsequent years. NCUA staff responded that the $500 million in prepaid assessments that will be used to reduce the regular assessment this year is coming from the assessments in 2013 and 2014, $250 million in each year. The Larger assessments in 2013 and 2014 will be needed to offset the fund’s cash flow needs in those years, since the prepaid assessment draws funds from credit unions that would have otherwise gone to the 2013 and 2014 assessments. It also was asked whether the Central Liquidity Facility could be used to lend funds to the stabilization fund to minimize the need for assessments from credit unions. NCUA staff said such a loan to the TCCUSF is not an allowable use of the CLF’s funds. In response to another question about what to reflect on call reports regarding the assessments, NCUA staff said nothing should be reflected on the June 30 report. Any prepaid assessment and the regular assessment would be reflected on the September call report. July 29 is a “hard and fast” date, and credit unions should notify the NCUA by that time whether they intend to participate, the agency said on the webinar. The program, first proposed in May, has the potential to decrease the currently projected 2011 Stabilization Fund assessment by 6.4 basis points (BP), from 24.9 bp to 18.5 bp, based on the March 31 level of total insured shares, according to the NCUA. Credit unions that wish to take part may pledge a minimum of $1,000 or 5bp of insured shares, whichever is greater. The maximum that can be contributed is 48 bp of those shares. The agency will not move forward with the plan if less than $500 million is pledged by credit unions by the July 29 date. Matz, during the webinar, reiterated that the NCUA has committed to use all received funds to decrease the 2011 assessment. The agency will tally the total amount of credit union commitments on Aug. 9, and, if it moves forward with the plan, will debit the amounts that have been pledged from credit union accounts on Aug. 18. In addition to the agency chairman, the following NCUA staff participated in the webinar presentation: Deputy Executive Director Larry Fazio, Examination and Insurance Director Melinda Love, and Chief Economist John Worth. This webinar will be archived on the NCUA website approximately two weeks after the event for those who cannot participate in the live session. As reported Monday in News Now, the Credit Union National Association has released a comprehensive white paper that will help its member credit unions assess whether or not they should take part in the corporate assessment prepayment plan. The white paper notes that the prepayment plan's financial benefits may not be broadly felt, but could prove vital for some credit unions. Use the resource link below to access the CUNA white paper (members only).