News
NCUA: Credit Unions Can Expect No Further Stabilization Fund Assessments — 9/23/16
The National Credit Union Administration announced on September 21 that updated information on the costs of the Corporate Resolution Programand the performance of the NCUA Guaranteed Notes Programis now available online.
The upper and lower ends of the projected assessment range for the Temporary Corporate Credit Union Stabilization Fund remain negative, from negative $2.4 billion to negative $4 billion, respectively. As long as both ends of the range remain negative, it is unlikely NCUA will charge credit unions future Stabilization Fund assessments.
“We have come a long way since the days when the credit union system faced up to $10.5 billion in possible Stabilization Fund assessments,” NCUA Board Chairman Rick Metsger said. “The carefully guided corporate resolution strategy, an improving economy and the agency’s determination to hold Wall Street firms accountable have together put federally insured credit unions in a position for a much less intimidating outcome. If these trends continue, credit unions can expect no further Stabilization Fund assessments.”
Credit unions have paid $4.8 billion in assessments since the creation of the Stabilization Fund in 2009. The Stabilization Fund is scheduled to close in 2021.
The assessment projections are based on the performance of the failed corporates’ legacy assets, legal recoveries and economic variables such as interest rates, unemployment and housing costs. Those variables and projections are subject to change. NCUA uses BlackRock, an independent securities valuation firm, to project the future performance of the legacy assets in the NCUA Guaranteed Notes Program.
The NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions.
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