ARLINGTON, Va.–NAFCU said it is seeking its members input on NCUA's proposals for closing down the Temporary Corporate Credit Union Stabilization Fund and on distributions by the National Credit Union Share Insurance Fund. Deadline for feedback to NAFCU is Aug. 22. The deadline for submitting comments to NCUA is Sept. 5.
As CUToday.info has reported, the proposal related to the TCCUSF involves the merger of the stabilization fund into the NCUSIF and an increase in the NCUSIF normal operating level from 1.3 percent to 1.39%. In issuing its proposal, the agency said the change will offset the increased risk of the stabilization fund's liabilities. The merger of the two funds will raise the NCUSIF's equity ratio; the excess above the 1.39 percent target would be distributed to insured credit unions, NCUA has said. It further said its moves indicate that NCUSIF-insured credit unions would not be charged a premium for several years.
As CUToday.info also reported, the second proposal would amend the method for determining an insured credit union's proportionate share of an NCUSIF equity distribution. It offers two methods for calculating that share, either an average of insured-share balances reported during the year's quarterly call reports or the year-end balance as of Dec. 31 of that year, NAFCU noted in its analysis. Credit unions that terminate coverage in the year of distribution would not share in that distribution.
“This proposal also addresses NCUSIF distributions related to the agency's Corporate System Resolution Program,” NAFCU noted. “Such distributions could be carried out as a series of distributions to repay any corporate assessments against insured credit unions on a first-in, first-out or last-in, first-out basis.”