December 13, 2016

Congress eyes impact of NCUSIF premium on CU lending

House Financial Services Subcommittee on Oversight and Investigations Chairman Sean Duffy, R-Wis., on Tuesday requested information by Dec. 27 from NCUA Board Chairman Rick Metsger on the impact a National Credit Union Share Insurance Fund premium charge could have on credit unions' lending.

More specifically, Duffy asked if the NCUA has done any economic modeling to show how a premium charge could impact credit unions' lending and operations and what the agency itself was doing to improve its operations in an attempt to prevent charging credit unions a premium.

"NAFCU thanks Congressman Duffy for his leadership on this issue," said NAFCU Vice President of Legislative Affairs Brad Thaler. "We appreciate his concerns for the health of the credit union industry."

The NCUA Board last month estimated a potential 2017 share insurance premium of 3 to 6 basis points. By statute, the agency is required to charge a premium if the National Credit Union Share Insurance Fund's equity ratio falls below 1.2 percent. As of Sept. 30, the ratio stood at 1.27 percent.

NAFCU maintains that no premium charge is necessary and is urging the agency to instead make operational changes to yield more positive results for the fund.