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The NCUA just wrapped their September board meeting, and as predicted and supported by CUNA, the Board voted to close the Corporate Stabilization Fund. In addition to closing the fund, the Board also discussed a proposed rule and the NCUA’s 2018-2022 strategic plan. You can find an overview and details below.
The next board meeting is scheduled for October 19th.
Proposed Rule, Part 740, Accuracy of Advertising and Notice of Insured Status.
The NCUA proposed to revise provisions of NCUA’s advertising rule. The advertising rule requires FICUs to use NCUA’s “official advertisement statement” when advertising. In addition to being permitted to use any of the three current versions of the official advertising statement, the Board proposes to allow FICUs the option of using a fourth version, namely by stating “Insured by NCUA.” The proposal would also: (1) expand a current exemption from the advertising statement requirement regarding radio and television advertisements; and (2) eliminate the requirement to include the official advertising statement on statements of condition required to be published by law.
NCUA’s 2018 – 2022 Strategic Plan.
The NCUA released a draft of the 2018–2022 draft strategic plan. The plan summarizes NCUA’s analysis of the internal and external environment impacting NCUA; evaluates the agency’s programs and risks; and provides goals and objectives for the next five years. The Draft Strategic Plan integrates the agency’s mission and overarching risk management philosophy with clear goals and objectives. The Strategic Plan highlights the agency’s three strategic goals and supporting strategic objectives, which reflect the outcome or greater impact of the broader strategic goals.
The three strategic goals for 2018 to 2022 are to: (1) Ensure a Safe and Sound Credit Union System; (2) Provide a regulatory framework that is transparent, efficient and improves consumer access.; (3); and Maximize organizational performance to enable mission success.
CUNA will review the draft strategic plan and make comments to the agency detailing how the agency can more efficiently regulate credit unions.
Closing the Corporate Stabilization Fund and Setting the Normal Operating Level.
As expected and supported by CUNA, the NCUA Board voted to close the Temporary Corporate Credit Union Stabilization Fund (Stabilization Fund). The Board also voted to set the National Credit Union Share Insurance Fund (Share Insurance Fund) normal operating level at 1.39%, which the Board supported with analysis from the Federal Reserve.
According to the NCUA credit unions should receive a rebate or dividend in 2018 between $600 million and $800 million. The NCUA also stated that credit unions will also receive between $600 million to $1.1 billion in dividends between 2019 through 2021. Furthermore, corporate capital holders could have between $1.1 billion and $1.9 billion returned to them in 2021. We note that future dividends and capital returns are dependent on the performance of assets and the U.S. economy.
CUNA was the only national trade association for credit unions to advocate for NCUA to close the stabilization fund and merge it with the National Credit Union Share Insurance Fund, thus enabling credit unions to start receiving refunds in 2018. Additionally, CUNA raised about the NCUA’s proposal to set the normal operating level at 1.39% and advocated it be lowered.
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