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News Now

Washington
NCUA should mirror FDICs flexible approach CUNA says
WASHINGTON (6/24/10)—The rate of the insurance assessments that are charged to banks covered by the Federal Deposit Insurance Corp. (FDIC) will remain steady through the end of this year, the FDIC has announced. The FDIC plans to apply a uniform three basis-point increase in assessment rates beginning on Jan. 1. The FDIC current assessment rate will return its deposit insurance fund to a positive balance by 2012. The Credit Union National Association's (CUNA) senior vice president and deputy general counsel, Mary Dunn, said that the FDIC’s decision “indicates its recognition of the economic realities that many banks it insures are facing and its willingness to hold off inflicting more pain on those banks through increased premiums at this time.” “This is the kind of flexibility that credit unions encourage the National Credit Union Administration (NCUA) to use, such as by allowing the National Credit Union Share Insurance Fund’s (NCUSIF) normal operating level to be set closer to 1.2%, as CUNA has advocated,” Dunn said. “This would help to mitigate credit unions' NCUSIF costs, without going under the 1.2% statutory benchmark under which more premiums would be triggered,” she added. The NCUA expects to levy an assessment to replenish the NCUSIF later this year. CUNA has estimated that this assessment could be somewhere between five and 10 basis points (bp), bringing the total amount assessed by the NCUA , including the 0.134% of insured shares assessed this month for the corporate credit union stabilization program, this year to between 18 and 23 bp of insured shares.


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