ALEXANDRIA, Va.–The National Credit Union Share Insurance Fund reported a $1.8-million loss for 2016, the agency’s CFO said during the February board meeting.
It was the first NCUA board meeting presided over by new Acting Chairman Mark McWatters.
Meanwhile, the number of problem credit unions, those CAMEL Code 4 and 5, declined to 196 at year-end 2016, down from 220 one year earlier and 409 at year-end 2011. Overall, the percentage of CAMEL Code 4/5 CU shares to total insured shares was 0.83%, according to NCUA CFO Rendell Jones.
One issue being watched by both the board and credit unions is the NCUSIF’s equity ratio, which closed 2016 at 1.24%. NCUA has traditionally sought to operate the fund with a 1.30% equity ratio, and some analysts have raised the issue of a potential premium (potentially as the result of losses related to taxi medallion loans, as CUToday.info reported here).
The NCUA board has the authority to set a different and lower target for the equity ratio should it choose to do so.
The NCUSIF closed 2016 with a net position of $12.8 billion.
During his presentation, Jones reported the number of CAMEL Code 3 credit unions at year-end 2016 was 1,123, down from 1,261 one year earlier. Those credit unions represent 7.67% of total insured shares.
During 2016, 14 credit unions failed. In response to a question from McWatters, Jones said 10 of those failures were the result of fraud. Throughout his term on the NCUA board McWatters has consistently raised questions related to fraud inside credit unions.