ARLINGTON, Va.—Growth in member share accounts, the biggest factor behind the post-COVID decline in the National CU Share Insurance Fund’s equity ratio, appears to be moderating, according to NAFCU's latest Economic & CU Monitor.
The most recent report examines mid-year data for the NCUSIF and finds the fund’s finances remain on solid ground.
From the end of 2019 through June 2021, the equity ratio declined by 12 basis points to 1.23%. That leaves the ratio just three basis points above its 1.20% statutory minimum.
“Any breach of that floor would require the NCUA to establish a restoration plan, which could involve a premium charge for insured credit unions,” NAFCU stated. “However, much of that decline is illusory, owing to a timing mismatch in credit unions’ capitalization deposit accounts, and most of the remaining decline is explained by abnormally high share growth.
‘Half the Pace’
"Fortunately, share growth is beginning to drop from its historic heights. Second-quarter share growth was half the pace of any quarter since the pandemic began," added the NAFCU research team. "At a minimum, the equity ratio of the SIF should remain comfortably above the 1.2 percent floor for several more years."