WASHINGTON—CUNA is encouraging NCUA to move “decisively” to begin paying refunds to credit unions from the Temporary Corporate Credit Union Stabilization Fund in 2017.
CUNA said such a payment would be made possible by the maturing of $3 billion of NCUA Guaranteed Notes (NGNs) next year, releasing the legacy assets collateralizing those NGNs.
In a Nov. 4 letter to NCUA, CUNA President/CEO Jim Nussle stated that CUNA welcomes the improving financial condition of the fund and the implications for what will eventually be sizeable refunds to credit unions of assessments and depleted capital.
"We understand that the primary constraint on the timing of refunds is that the vast majority of NCUA Guaranteed Notes do not mature until 2020 and 2021 ... Nevertheless, a significant portion of the NGNs will mature in 2017," Nussle wrote. “We therefore request that NCUA announce and establish a process to engage with credit unions, state credit union leagues and CUNA regarding the disposition of available assets in 2017, with the goal of providing refunds to assessment payers and/or former capital holders as soon as possible, and in the maximum amounts possible. “
CUNA said its economics and statistics experts have developed a background paper for CUNA member credit unions, which includes an update of the stabilization fund’s conditions and offers projections regarding the size and timing of possible refunds to credit unions.