The NCUA Board adopted a plan to permit voluntary prepayments of $500 million in Corporate Stabilization Fund assessments.
The program has the potential to decrease the currently projected 2011 stabilization fund assessment by 6.4 basis points (bp), from 24.9 to 18.5 bp of insured shares.
NCUA says it designed this program with these principles in mind:
NCUA made several changes to its original voluntary stabilization fund prepayment plan. The agency:
Elements remaining from the original proposal:
Participating credit unions will not accrue interest on prepaid assessments.
NCUA will apply the program amounts as offsets against stabilization fund assessments for the years 2013 and thereafter, subject to any remaining balance. Voluntarily prepaying future assessments will not change the ultimate cost of the Corporate System Resolution.
Program information and instructions regarding participation are available here. Participating credit unions must download and return the participation form by July 29.
On Aug. 9, NCUA will tally the participation level to see if credit unions commit to $500 million. If not, the program won’t be executed and the regular scheduled assessment would be billed.
If credit union commitments exceeded the program amount, participating institutions will be debited a prorated amount of their commitment on Aug. 18, and a reduced assessment would follow.
A U.S. District judge Monday dismissed three lawsuits--including one by the National Credit Union Administration--brought against U.S. Bank National Association and Bank of America, National Association regarding their duties as trustees of residential mortgage-backed securities.