Removing Barriers Blog

NCUA Wants Comments Soon on Corporate Stabilization Fund Closure
Posted July 27, 2017 by CUNA Advocacy

The NCUA’s plan to close the Temporary Corporate Credit Union Stabilization Fund and setting the share insurance fund’s operating level was published in the Federal Register Thursday. Comments on the proposal are due by Sept. 5; however, the NCUA has encouraged credit unions to comment as soon as possible as NCUA is working against an end of September deadline to shutter the fund. The NCUA approved the request for comment at its July board meeting, and CUNA plans to work closely with NCUA throughout the process. 

The notice outlines how NCUA would shut down the fund and transfer the fund assets to the share insurance fund, from which it would make a distribution. 

The stabilization fund would be shut down on October 1st and a distribution would be made in the second quarter of 2018.  The projected 2018 distribution to credit unions would be $600 to $800 million with a total projected distribution of $1.4 to $1.7 billion, with the balance to be paid at a later date.  NCUA would also increase the normal operating level of the NCUSIF from 1.30% to 1.39% because of the risk to the fund when it includes stabilization fund assets.

CUNA will have a detailed analysis of the distribution and increase in the normal operating level soon.