The NCUA board approved a lowering of the normal operating level (NOL) at Thursday’s board meeting. CUNA has strongly pushed NCUA to lower the NOL, eventually to 1.3%.
The board approved lowering the NOL to 1.38%, down from the current 1.39%, effective immediately. NCUA raised the NOL temporarily in order to close the Temporary Corporate Credit Union Stabilization Fund and issue share insurance fund distributions.
“We thank NCUA for taking action to phase down the NOL. We strongly supported NCUA issuing share insurance fund distributions with the expectation that a rise in the NOL was temporary,” said CUNA Chief Advocacy Officer Ryan Donovan. “We’re encouraged that NCUA is honoring its commitment to review the NOL each year, and look forward to the possibility of an additional dividend depending on NCUA’s analysis.”
NCUA stated the increase in the NOL was necessary while the share insurance fund holds corporate legacy assets.* (UPDATE)
* - An earlier version of this story incorrectly stated that the "NOL would be phased down to 1.3% by 2021." The board did not say this during the meeting, but has stated, in both public remarks and board meetings, that any decision related to the NOL would be data dependent. According to NCUA, the agency will continue to analyze the share insurance fund's risk exposure, and the board will evaluate what the NOL should be, based on relevant data and trends as they evolve over time.