NCUA to repay Treasury $300M from TCCUSF
ALEXANDRIA, Va. (8/3/15)--The National Credit Union Administration will make a $300 million payment to the U.S. Treasury in the near future, paid from the Temporary Corporate Credit Union Stabilization Fund.
Vice Chair Rick Metsger first made the announcement last week at the American Association of Credit Union Leagues’ summer meeting.
“CUNA appreciates Vice Chairman Metsger telling us that the corporate stabilization fund continues to improve and that NCUA plans to pay another installment on the Treasury funding,” CUNA said in a statement. “We remain confident that once the Treasury has been fully repaid, credit unions will receive partial refunds of their stabilization assessments.”
The payment would bring the total amount owed to the Treasury by the NCUA down to $2.3 billion. The NCUA started borrowing from the Treasury at the height of the economic crisis, starting in June 2009 with $1 billion.
From February 2010 to October 2012, the agency borrowed an additional $9.4 billion but also repaid $5.8 billion during that period.
No funds have been borrowed since October 2012, and since then the agency has made four payments totaling $2.5 billion. The most recent payment was $300 million in June 2014.
“NCUA’s careful management of the overall corporate resolution effort has brought us one step closer to bringing closure to the financial crisis that threatened the entire credit union system,” said NCUA Chair Debbie Matz in a statement. “This effort, combined with a determined strategy to hold accountable the Wall Street firms that sold billions of dollars in toxic assets to the five failed corporate credit unions, has saved credit unions billions of dollars.”
CUNA’s economics staff believes credit unions will not likely have to pay any further stabilization fund assessments, and believes credit unions can look forward to a modest rebate by 2021, when the stabilization fund is scheduled to expire by law.
Larry Fazio, director of the NCUA’s Office of Examination and Insurance, said at the agency’s July meeting that projections show no likely need for future assessments, and rebates would be possible only after the Treasury is repaid and other obligations are met.