NAFCU, in video, discusses NCUA's stabilization fund closure proposal
NAFCU's Curt Long and Alexander Monterrubio urged credit unions to weigh in on the NCUA's proposal to close the Temporary Corporate Credit Union Stabilization Fund, and provided some background on the proposal, in a new NAFCU Today video published online Thursday.
The NCUA proposal suggests merging the TCCUSF into the National Credit Union Share Insurance Fund and raising the NCUSIF normal operating level from 1.3 percent to 1.39 percent. The proposal was issued during the July open board meeting.
Long, NAFCU's vice president of research and chief economist, explained that the increase in the normal operating level would negate the need for credit unions to pay a discretionary share insurance premium charge this year. NAFCU has staunchly opposed since that possibility was announced last year.
Closing the stabilization fund could provide credit unions with an estimated dividend in the 15 to 17 basis point range, he said, but raising the NCUSIF normal operating level from 1.3 to 1.39 percent, as the NCUA proposes, "would eat into the dividends credit unions would receive … so that ultimate dividend is only projected to be 6 to 8 basis points."
Monterrubio, NAFCU's director of regulatory affairs, encouraged credit unions to write comment letters to the agency on this proposal. He discussed various NAFCU resources to help credit unions formulate their comments: the association's Regulatory Alert, a comment letter template with talking points and an economic analysis and forecast predicting how the proposal may affect NCUSIF dividends to insured credit unions.
Comments on this proposal are due to the NCUA by Sept. 5; NAFCU is also seeking members' input to the association's official comment letter by Aug. 22.
Get daily updates.
Subscribe to NAFCU today.