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Today is NCUA prepayment participation deadline
ALEXANDRIA, Va. (7/29/11)—Credit unions that wish to take part in the National Credit Union Administration’s (NCUA) voluntary Corporate Stabilization Fund assessment prepayment plan must notify the agency of their intent by the end of the day. Credit unions that wish to take part in the plan may pledge a minimum of $1,000, or 5 basis points (bp) of March 31, 2011 insured shares, whichever is greater. The maximum that can be committed is 48 bp of those same shares. The agency has set the target size of the program at $500 million, and will not move forward with the plan if less than $500 million is pledged by credit unions. If credit unions pledge funding beyond the NCUA’s proposed $500 million target program size, each credit union’s payment will be a prorated portion of its total fund commitment. The prepayment plan could reduce the 2011 regular assessment from about 25 bp to about 18.5 bp. NCUA Chairman Debbie Matz has emphasized that participation in the prepayment plan is voluntary, and said that the agency is neither encouraging nor discouraging credit union participation in the program. A recent Credit Union National Association (CUNA) white paper noted that the prepayment plan was not as large as CUNA had hoped, but it could prove vital for some credit unions. CUNA has encouraged credit unions to consider the extent to which the program will benefit them and whether they should participate. CUNA Chief Economist Bill Hampel said that some credit unions have told CUNA that they will participate, while others have indicated that they will not. “We really don’t have a good read on how this will come out” he said. 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 prorated amounts that have been pledged from credit union accounts on Aug. 18. The NCUA is expected to set its 2011 Temporary Corporate Credit Union Stabilization Fund assessment at an Aug. 29 meeting. For CUNA’s white paper, use the resource link.


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