ALEXANDRIA, Va.–During the same meeting at which the question of whether a NCUSIF premium assessment will be needed was discussed, members of the NCUA board were given an update on the state of the National Credit Union Share Insurance Fund.
The key issue is the fund’s equity ratio, which as of June 30 was 1.22%, well below the board’s approved normal operating level (NOL) of 1.38%. Should the fund’s NOL slip below 1.20%, credit unions would need to replenish the fund. The decline is not being caused by losses but instead by the influx of deposits into credit unions.
Overall, the National Credit Union Share Insurance Fund reported a net income of $20.5 million and $17.7 billion in assets for the second quarter of 2020. The fund also reported $72.1 million in total income for the second quarter of 2020.
NCUA noted the NCUSIF will receive additional capitalization deposits of approximately $1.5 billion from insured credit unions in October after the NCUA invoices for its semi-annual contributed capital adjustment this month for credit unions with $50 million or more in assets.
Other Metrics
Other NCUSIF performance metrics for Q2:
- The number of CAMEL codes 4 and 5 credit unions decreased 5.1% from the end of the first quarter, to 166 from 175. Assets for these credit unions decreased 1.0% from the first quarter, to $10.3 billion from $10.4 billion.
- The number of CAMEL code 3 credit unions decreased 3.3% from the end of the first quarter, to 785 from 812. Assets for these credit unions increased 4.7% from the first quarter, to $44.6 billion from $42.6 billion.
- In the second quarter of 2020, there was one federally insured credit union failure that caused a loss to the Share Insurance Fund. Total year-to-date losses associated with this failure is $1.6 million.