Removing Barriers Blog

Board Member Metsger Backs CUNA’s Position, But States 2018 Stabilization Fund Distribution Could Be at Risk
Posted August 31, 2017 by CUNA Advocacy

Today, CUNA filed a comment letter with the NCUA supporting the agency’s plan to close the Corporate Stabilization Fund and return a portion of the corporate special assessments charged to credit unions in 2018. This would also result in credit unions not being assessed an insurance premium as well.  Today, Board Member Metsger made a statement at a NASCUS conference highlighting the risk of opposing CUNA's position.

“I do note that one trade organization, NAFCU, has asked now that we delay closing the fund at this time,” Metsger said. “That, of course, would delay until at least 2019 any potential distribution to credit unions as well as put a premium back on the table to address the declining equity ratio in the Share Insurance Fund. There are still a few days left for credit unions to comment on closing the fund, and I encourage them to do so. I will be interested in whether they support the trade association’s position to not close the fund at this time. We will carefully weigh all points of view.”

CUNA’s comment letter states in no uncertain terms that the agency’s plan to merge the Corporate Stabilization Fund into the National Credit Union Share Insurance Fund (NCUSIF) is legal and required by the Federal Credit Union Act as the only way to distribute Stabilization Fund assets to credit unions. CUNA did take issue with the NCUA’s plan to raise the NCUSIF normal operating level to 1.39%. We wrote that the agency should return the NOL to historical 1.3%, but would find it acceptable if the agency increased the NOL by four basis points to hedge against the risk as Corporate Stabilization Fund Assets mature. CUNA will continue to advocate for a quick return of the NOL to 1.3%.