CUNA fully supports NCUA’s proposed plan to close the Temporary Corporate Credit Union Stabilization Fund, merge its assets into the share insurance fund and repay credit unions a portions of stabilization fund premiums in 2018. CUNA is the only national trade association for credit unions advocating for refunds to begin in 2018.
“CUNA’s number one priority is to ensure credit unions get their money back in 2018, no later, and we will advocate to ensure nothing slows down the process," said CUNA President/CEO Jim Nussle. "We engaged throughout this process with members of our Examination and Supervision subcommittee, leagues and CUNA member credit unions, and feedback has been consistent that refunds should be given to credit unions as soon as possible.
"As the only national trade association advocating for stabilization funds to be returned to credit unions in 2018, CUNA will work closely with the agency as this process moves forward," Nussle added. "The corporate crisis is over and the purpose of the stabilization fund has expired. There is no argument to be made that NCUA is a better steward of these resources than credit unions."
CUNA does have concerns with parts of the proposal that authorize NCUA’s to raise the normal operating level (NOL) to 1.39%, and addressed them in its comment letter filed with the agency Thursday.
“CUNA strongly believes this is unnecessarily high and would be a sharp departure from NCUA’s past successful management of the equity ratio,” the letter reads.
Instead, CUNA recommends NCUA temporarily increase the normal operating level by 4 basis points to insulate the share insurance fund from legacy asset volatility.
CUNA also pushed NCUA to explicitly state the increase in the normal operating level is temporary, only lasting until the legacy assets remain on the share insurance fund’s balance sheet.
CUNA will continue its work with NCUA to return more stabilization fund assets to credit unions by returning the normal operating level to 1.3%. In addition, CUNA will work to ensure accounting of assets is done in a transparent manner.
Additional details, including CUNA’s legal analysis, can be found on CUNA’s Removing Barriers Blog.