May 17, 2017

NAFCU updates FAQ on corporate stabilization fund

NAFCU's Regulatory Compliance team this week updated its frequently asked questions document to help credit unions understand and keep up with developments related to the NCUA's Temporary Corporate Credit Union Stabilization Fund.

Updated areas of the FAQ include explanations of the potential ramifications of the NCUA raising the National Credit Union Share Insurance Fund's normal operating level and the potential risks of closing the TCCUSF prior to 2021.

The FAQ document also explains why federally-insured credit unions were required to pay stabilization assessments, what the TCCUSF does, how the NCUA Guaranteed Notes program works, and summarizes the NCUA's recoveries so far from suits against firms that sold faulty securities to the corporates.

The TCCUSF is scheduled to close in 2021. Credit unions have paid $4.8 billion in assessments since the creation of the fund in 2009. No further assessments are expected. Meanwhile, the agency's recoveries from firms that sold faulty mortgage-backed securities to corporate credit unions have risen to $5.1 billion.

NAFCU has urged the NCUA to explore all options to issue TCCUSF rebates as soon as possible.