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Matzs first meeting 0.15 NCUSIF assessment CLF changes
ALEXANDRIA, Va. (9/25/09)--As anticipated, the National Credit Union Administration (NCUA) on Thursday approved a 0.15% of insured shares assessment on federally insured credit unions. The action is intended to help the NCUA return the National Credit Union Share Insurance Fund’s (NCUSIF) equity to 1.3% of June 30, 2009 shares and repay $310 million in funds the Stabilization fund has borrowed from the U.S. Treasury. The assessment would also repay all interest accrued by the NCUSIF as of June 30, 2010. Assessments will be invoiced no later than mid-November of this year, and payments will be due by mid-December.
Click for slide show NCUA Chair Deborah Matz talks with CUNA President/CEO Dan Mica before she calls her first open board meeting to order in her role as the agency’s new leader. (CUNA Photo)
The NCUA did indicate that additional assessments could be imposed in 2010 or 2011. However, whether or not additional assessments would be charged is dependent on future economic conditions. NCUA Chairman Deborah Matz said that while the board cannot fully predict how much any future assessments, if necessary, would cost credit unions, she did say that the board would try to provide credit unions with a budgetary range for any future assessments at its upcoming October board meeting. The NCUA did not alter the NCUSIF’s operating level of 1.3%, but changes to that level could be proposed in the future. Agency staff indicated they are studying this issue and if an increase is recommended, the agency would seek public comments on such a move. Opening her first meeting as NCUA Chairman, Matz spoke on her new role as leader of the credit union system, saying that her first priority as a regulator is to protect the deposits of all credit union members. The NCUA Board approved amendments that will “clarify and reinforce” the NCUA’s guarantee for corporate credit unions issuing unsecured debt under the agency's Temporary Corporate Credit Union Liquidity Guarantee Program (TCCULGP) and “further enhance” corporate credit unions’ liquidity by increasing their access to low-cost borrowed funds. This means that additional borrowing costs for the corporates could be reduced because the “highest possible rating” could now be obtained for debt that is issued under the TCCULGP. Natural person credit unions could benefit from NCUA’s revisions to the investment and earnings retention policies of the Central Liquidity Fund (CLF). These changes will allow the CLF to support its own operations through retained earnings while “greatly enhancing” the CLF’s ability to support natural person credit unions, CLF President J. Owen Cole said. NCUA Chief Financial Officer Mary Ann Woodson also discussed natural person credit unions during the meeting, reporting that there are currently 315 CAMEL 4 and 5 credit unions, an increase from the 242 reported in August of 2008.


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