CUNA staff attended Wednesday’s NCUA webinar on its planned closure of the Temporary Corporate Credit Union Stabilization Fund. The NCUA issued a request for comment on a plan to close the stabilization fund at its July meeting, comments on which are due Sept. 5.
“It’s very important we get feedback from stakeholders by the Sept. 5 deadline,” said Larry Fazio, director of NCUA’s Office of Examination and Insurance. “If we’re not able to close the fund by the end of this year, based on statute, we would not be able to make any distributions until 2019, that’s why time is of the essence to have the board act on this.”
Under the plan NCUA seeks input on, the stabilization fund would be shut down Oct. 1 and a distribution would be made in the second quarter of 2018.
The projected 2018 distribution to credit unions would be $600 to $800 million with a total projected distribution of $1.4 to $1.7 billion, with the balance to be paid at a later date.
NCUA would also increase the normal operating level of the NCUSIF from 1.30% to 1.39% because of the risk to the fund when it includes stabilization fund assets.
CUNA issued a white paper earlier this year examining the decisions NCUA will have to make when winding down its Corporate Resolution Program, which includes the stabilization fund.