WASHINGTON (3/30/09)—If an accountant is willing to be flexible about when a credit union books the cost of their 1% premium being assessed to replenish the National Credit Union Share Insurance Fund (NCUSIF), the National Credit Union Administration (NCUA) said it will be okay with that. A senior NCUA staff member told the Credit Union National Association that the agency will not necessarily challenge a decision of a credit union’s CPA or auditor to take into consideration a recent legislative proposal by the NCUA when making an accounting decision about when to book the replenishment. The NCUA declared a premium would be collected from natural person credit unions later this year to cover the cost to the NCUSIF of the agency’s actions to stabilize corporate credit unions liquidity. The agency announced Thursday that it has drafted legislation to allow credit unions to spread the cost of the replenishment over as many as seven years. However, it will take an act of Congress to authorize the longer time frame. Addressing the uncertain situation faced by credit unions, the NCUA staff member made the following points:
* NCUA does not set accounting rules; * Based on what AICPA put out recently, credit unions can book their costs in 2008 or 2009; * For credit unions that choose to book in this year, the NCUA already has advised that the 1% deposit replenishment must be booked by March 31; * The premium will be assessed later in the year, likely September, and should be booked then; and * The legislation being sought by the NCUA is not a certainly and therefore should not affect the March 31 statements.
Most important, NCUA said that if a credit union's CPA or auditor approves taking the legislation into consideration in deciding whether the 1% replenishment must be recognized by March 31st, NCUA will not necessarily challenge it.