NCUA Money Watch

Dan NCUA Hearing Oct 2016Your members' money exclusively funds the operations of NCUA, and because every single dollar counts, NAFCU holds the NCUA to the highest standards when it comes to managing the Credit Union Share Insurance Fund (NCUSIF), refunds from the Temporary Corporate Credit Union Stabilization Fund (TCCUSF) and the agency's operating budget.

NCUA has come a long way since NAFCU first called for it to be more transparent, but transparency is just the first step. Now it is incumbent upon us to watch what NCUA does, and to keep the agency accountable.

We take this issue seriously and will remain vigilant, keeping watch to see that your members' money is not frivolously spent or needlessly wasted.

NCUA Credit Union Share Insurance Fund Premium

Due to NCUA's projected decline in the National Credit Union Share Insurance Fund (NCUSIF) equity ratio, agency staff has recommended a premium charge to credit unions in 2017 of three to six basis points. The premium charge would be in an effort to return the equity ratio to the normal operating level of 1.3 percent from its 2017 projections of 1.24 to 1.27 percent.

None of NCUA's projections have indicated that the equity ratio would fall below the statutory minimum of 1.2 percent in 2017.

Our Position: NCUA should work diligently to maintain an equity ratio above the statutory minimum of 1.2 percent through prudent management of the NCUSIF, not an unnecessary and costly premium charge for credit unions in 2017.

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Credit Union Refunds from the NCUA Temporary Corporate Credit Union Stabilization Fund

In July 2017, NCUA proposed to close the Temporary Corporate Credit Union Stabilization Fund (TCCUSF) in 2017 and increase, for the time-being, the Normal Operating Levelc (NOL) of the NCUSIF. Under the proposal, the assets and liabilities of the Stabilization Fund would be distributed to the NCUSIF, which would increase the SIF's equity ratio.

NCUA estimates that merging the Stabilization Fund into the SIF would provide credit unions with a partial rebate, but NAFCU believes that any rebate should be much greater and that the proposed increase of the NOL is unacceptable.

For our part, NAFCU believes the agency's decision must take into account two facts: 1) under the Federal Credit Union Act, NCUA is not required to assess a premium in 2017, and 2) NCUA has the ability to return assets to credit unions directly. The money credit unions paid to NCUA came from their members, and it should be returned to the fullest extent possible.

Our Position: NAFCU strongly urges the agency to avoid such a dramatic increase of the NOL and to rebate credit union monies as soon as possible.

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NCUA Budget

Following repeated requests from NAFCU, the NCUA Board held a public budget briefing in October 2016 for the first time in several years.  At the briefing, NAFCU President and CEO Dan Berger delivered remarks urging the NCUA Board to significantly reduce the agency's operating budget. Although slightly lower than draft numbers, the 2017-2018 NCUA operating budget was still increased by 2.5 and 4.7 percent, respectively.

Our Position: The NCUA board should discover efficiencies within the agency to help reduce overall operating budget corresponding to the consolidation of the industry. We urge the agency to continue to provide increased transparency in the budget process as well.

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Updated July 2017