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NCUA reports improving CU financials, proposes voluntary closing rule
ALEXANDRIA, Va. (2/21/14)--The recent trend of positive financial results for the credit union system continued this week, with the National Credit Union Administration reporting continued declines in the number of CAMEL code 3, 4 and 5 credit unions.

NCUA CFO Mary Ann Woodson released the results during Thursday's February open board meeting.

The NCUA in its quarterly report on the status of the National Credit Union Share Insurance Fund said there are currently 307 CAMEL 4 and 5 credit unions, which represent 1.40% of insured shares, or approximately $12.1 billion. NCUA staff also noted that there are 1,480 CAMEL 3 credit unions, which represent 11.19% of insured shares, or $96.9 billion. Combined, insured shares in CAMEL 3, 4, and 5 credit unions represent approximately 12.6% of total insured shares.

According to the NCUA, the amount of assets in CAMEL code 3, 4 and 5 credit unions have decreased 40.5% since reaching a high in September 2010. "The continuation of these positive trends and other factors contributed to a net decrease of $191.8 million, or 46.5 percent, in the Share Insurance Fund's reserve for insurance losses during 2013," the agency added.

The total number of credit union failures also declined last year, falling to 17 from the 2012 total of 22.

"Protecting the Share Insurance Fund is NCUA's top priority, and the 2013 year-end results reflect the agency's prudent management and effective approach to regulation," NCUA Chairman Debbie Matz said. "The metrics continue trending in the right direction. Liquidations and assisted mergers fell sharply, with a substantial drop in actual losses to the fund."

The agency today also proposed a rule on the voluntary liquidations of federal credit unions.

The proposed rule would:
  • Permit liquidating federal credit unions to publish required creditor notices in electronic media or newspapers of general circulation;
  • Increase the asset size threshold for requiring multiple creditor notices, by exempting federal credit unions with less than $1 million in assets from the publication requirement, and exempting federal credit unions with less than $50 million in assets from the multiple publication requirement;
  • Specify that preliminary partial distributions to members must not exceed insured account balances;
  • Specify when liquidating federal credit unions must determine member share balances for distribution purposes; and
  • Permit liquidating federal credit unions to distribute member share payouts either by wire or other electronic means, or by mail or personal delivery.
Matz said the changes are intended to modernize the rule and factor in credit union growth since 1993, which was when the rule was last updated.
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