WASHINGTON (3/19/14)--Tuesday's announcement that the upper end of projected corporate stabilization assessments declined by $2.2 billion between July and December 2013 "reaffirms the good news credit unions received last fall," Credit Union National Association Chief Economist Bill Hampel said.
"The current projected range for total future remaining assessments is now between negative $2 billion and negative $600 million. At the end of the second quarter of 2013, the total range was negative $200 million to $1.6 billion," the National Credit Union Administration reported.
The agency said the Temporary Corporate Credit Union Stabilization Fund assessment decrease was largely due to the JPMorgan Chase settlement reached in November 2013.
"The more than $1.75 billion in recoveries from NCUA's litigation has certainly brought relief to credit unions, but it's also good to see the general trends continuing," NCUA Chairman Debbie Matz said in a release. "An improving economy and NCUA's continuing efforts to effectively manage losses from the corporate failures at this time make us hopeful that we will not need to make future credit union assessments," she added.
CUNA's Hampel said the midpoint of the range of total projected corporate resolution costs is now $9.1 billion, down from $15 billion as of mid-2010. "That's almost $6 billion of costs that credit unions will not have to pay," he noted.
Credit unions can expect some combination of assessment rebates or repayment of depleted corporate capital, Hampel said, noting that these refunds are extremely likely, but not guaranteed.
"They'll depend on the future performance of the remaining legacy assets. That's the good news. The not-so-good news is that those payments are several years in the future," Hampel advised.