WASHINGTON–In follow up to the publication of a white paper concerning the wind-down of the agency’s Corporate Resolution Program by CUNA, Bill Hampel, CUNA’s chief policy officer, said there is good news to be found for credit unions, although the “devil is in the details,” said Hampel.
The good news comes in the form of refunds to credit unions on the billions of dollars of assessments and other funds credit unions have put toward covering all the losses suffered by the five corporate credit unions that were eventually placed into conservatorship. But the losses have not been as deep as projected.
At the height of the financial crisis Hampel noted the estimates for the total cost related to the failed corporates was $15 billion. But the performance of those assets has exceeded projections as the economy improved while interest rates remained low, and total losses are now estimated at approximately $6 billion. In addition, lawsuits filed by NCUA against banks that sold failed mortgage-backed securities have netted approximately $3.2 billion in recoveries. In total, credit unions paid approximately $10 billion in assessments to the agency.
“So the good news is credit unions will receive between $3.4 billion and $5 billion in refunds,” said Hampel. “The bad news is it’s likely to take several years for that to happen. It’s possible some of that could occur this year. But full refunds will not come until 2021.”
Given that scenario, CUNA has published the white paper examining three policy decisions it said NCUA will need to make concerning the wind-down of the agency’s Corporate Resolution Program.
The paper includes a recommendation to merge the National Credit Union Share Insurance Fund and the Temporary Corporate Credit Union Stabilization Fund (TCCUSIF) this year and begin the process of assessment rebates.
For additional details on the white paper, including a copy of the white paper itself, go here.
http://cutoday.ssd.thinkcreativeinternal.net/Fresh-Today/White-Paper-Examines-The-Wind-Down-of-Corporate-Resolution-Program