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News Now

Washington
TCCUSF federal rate cap more on NCUA agenda
ALEXANDRIA, Va. (7/18/12)--The National Credit Union Administration's (NCUA) 2012 Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessment will be unveiled when the agency holds its July open board meeting next Tuesday at 10 a.m. ET.

NCUA Director of Examinations and Insurance Larry Fazio last month acknowledged to the Credit Union National Association (CUNA) that the agency's 2012 TCCUSF assessment could be in the range of eight and 11 basis points (bp). Earlier this year, CUNA predicted the 2012 corporate stabilization assessment would be around nine bp of insured shares in 2012.

Access to emergency liquidity will also be discussed at the open board meeting. The NCUA in late 2011 asked for public comment on whether credit unions should be required to maintain access to emergency liquidity, and outlined a number of options that credit unions could take to ensure they maintain needed liquidity in times of financial stress.

The agency suggested credit unions could ensure liquidity by:
  • Becoming a member of the NCUA's Central Liquidity Facility (CLF) by subscribing to CLF stock or through a corporate credit union;
  • Obtaining and maintaining "demonstrated access" to the Federal Reserve Discount Window; or
  • Maintaining a certain percentage of their assets in highly liquid U.S. Treasury securities.
CUNA and credit unions earlier this year said they did not support a new emergency liquidity regulation. "Credit unions should decide for themselves, based on their risks, whether an emergency liquidity source is called for and what the source or sources should be," CUNA said in a comment letter to the NCUA.

An adjustment to the agency's 2012 operating budget, and, potentially, a change to the interest rate cap for federal credit unions are also on the agenda.

The federal credit union loan interest-rate ceiling has stood at 18% for some time, and the NCUA last year voted to maintain that rate ceiling. The agency is required by the Federal Credit Union Act to set the ceiling, at least every 18 months, if the rate ceiling is to exceed the 15% maximum rate established by law.

A proposed rule addressing the agency's definition of a credit union that is in "troubled condition," and a board briefing on an interagency Truth in Lending Act proposal, are also on the schedule.

The NCUA's quarterly report on the status of the National Credit Union Share Insurance Fund (NCUSIF) and the TCCUSF will also be presented.

A closed NCUA board session will not follow the open meeting this month. Instead, the monthly closed board meeting will be held on Monday, July 23. A creditor claim appeal and a discussion of supervisory activities are on the agenda for the closed meeting, which is scheduled to begin at 2:30 p.m. ET.

For more on the July open and closed NCUA board meetings, use the resource links.
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