ARLINGTON, Va.—NAFCU President and CEO Dan Berger has again strongly urged the NCUA to reconsider whether a 2017 National Credit Union Share Insurance Fund premium is necessary and to “exhaust all options prior to charging such a premium.”
Berger wrote the agency in response to a letter NCUA Board Chairman Rick Metsger sent to House Financial Services Subcommittee on Oversight and Investigations Chairman Sean Duffy (R-WI) last week. Metsger told Duffy that NCUA’s current analysis shows the NCUSIF equity ratio isn’t expected to fall to its statutory floor of 1.2% in 2017, even under the model’s severely adverse scenario.
In light of this, Berger told Metsger that the agency’s “stated need of charging a premium of 3-6 basis points in 2017 is not supported” by its own findings.
“While it does appear that the equity ratio could approach the statutory-floor of 1.2%, such a scenario is far from certain,” Berger wrote. He urged the agency to not charge a premium “unless it is absolutely necessary, and only after all other options have been exhausted, such as more prudent management of the NCUSIF expenses and investment portfolio, or until the dissolution of the Temporary Corporate Credit Union Stabilization Fund (TCCUSF) is complete.”
Berger also said that by the time the NCUA estimated a premium charge at its November board meeting, most federally insured credit unions had already finalized their 2017 budgets.
“Thus, despite good intentions, the impact of the advance notice provided negligible benefit for 2017 budgeting purposes,” Berger added. “Should the agency move forward with a 3-6 basis point premium charge, it would result in $300 million to $600 million of shifted resources from credit unions and their members to the government coffers.”