Newsroom

NAFCU, in a letter to the NCUA Tuesday, reiterated its view that pairing closure of the Temporary Corporate Credit Union Stabilization Fund (TCCUSF) with a sharp hike in the National Credit Union Share Insurance Fund's (NCUSIF) normal operating level (NOL) is not in credit unions' best interests.

"Any proposal that raises the NOL to 1.39 percent, the highest level in the history of the SIF, as a precondition for closing the Stabilization Fund would deprive credit unions of a full and fair return of paid-in corporate assessments," wrote NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt. "NAFCU believes credit unions should receive all of their money back as soon as possible - not just a portion."

She added that if the NCUA moves forward with merging the Temporary Corporate Credit Union Stabilization Fund (TCCUSF) with the NCUSIF now or in the future, the association would support efforts to identify "a fair and transparent method for determining a federally-insured credit union's proportionate share of a SIF equity distribution."

The NCUA is proposing to amend the method for determining an insured credit union's proportionate share of an NCUSIF equity distribution. The agency offers two methods for calculating that share, either an average of insured-share balances reported during the year's quarterly call reports or the year-end balance as of Dec. 31 of that year. Credit unions that terminate coverage in the year of distribution would not share in that distribution.

Hunt made several recommendations to the proposal, including, among others, that the NCUA determine a federally insured credit union's proportionate equity distribution share by using the average of its four quarter-end insured share balances reported.