Newsroom

August 05, 2015

NCUA: Puerto Rico default has no material NCUSIF impact

Puerto Rico's default on a monthly debt payment that was due Monday poses no "material risk" to the National Credit Union Share Insurance Fund through the 12 federal credit unions headquartered there, according to an agency spokesman.

Puerto Rico has about $72 billion in public debt held by local investors, and reports say credit unions are among those investors. But NCUA notes the distinction between the 115 credit cooperatives, or "cooperativas," chartered, regulated and insured by the Puerto Rican government and the 12 U.S. federal credit unions in Puerto Rico that are regulated and insured by NCUA.

"Any exposure on the part of the federal credit unions to the bonds in question issued by Puerto Rico is minimal," agency spokesman John Fairbanks said in an email. "This minimal exposure does not represent a material risk to the Share Insurance Fund."

Fairbanks noted the 12 federal credit unions in Puerto Rico had about 80,000 members and aggregate assets of about $700 million in the first quarter of this year. By contrast, Puerto Rico's cooperativas reportedly have nearly $9 billion in assets and 1 million members. Fairbanks said the cooperatives are estimated to have had about $1.3 billion in government and government-related bonds in 2013.

NAFCU closely monitors all developments that might have any potential impact on the NCUSIF and insured credit unions.