ARLINGTON, Va.—NAFCU is again urging NCUA not to assess an NCUSIF premium in 2017.
“NAFCU is hopeful that a premium will not be necessary in 2017, and encourages the agency to continue to publicly explore all available avenues to negate the need for a premium,” NAFCU said in a letter to NCUA from its Share Insurance, Liquidity and Development Fund Oversight Committee. “If NCUA does ultimately decide to move forward with a premium charge, NAFCU urges the agency to release additional information and advance guidance to provide our members with clarity for planning purposes.”
The committee also thanked the board for its transparency and public deliberation regarding the possibility of the premium. However, the committee urged NCUA to focus on maximizing investment returns, minimizing insurance losses and controlling operating expenses in order to prudently manage the NCUSIF.
In regards to the risk-based premium approach, the committee noted that, “As NCUA examines the ramifications of using a risk-based premium for the NCUSIF, NAFCU reminds the board that asset size is not determinative of risk. Rather, a credit union’s activities, practices and programs are more indicative of risk than just simply evaluating asset size. If the agency continues to study a risk-based premium approach, NAFCU encourages the board to hold briefings to publicly discuss the permissibility of using risk-based premiums, and what effects such a change would have on the industry. “
The last premium charge for the share insurance fund was in 2010 and amounted to 12.42 basis points, NAFCU noted. By statute, the agency is required to charge a premium if the NCUSIF’s equity ratio falls below 1.2%. As of Sept. 30, the ratio stood at 1.27%.