March 18, 2014

Revised TCCUSF projections support end to assessments

March 19, 2014 – NCUA said the upper end of total projected assessments associated with the Temporary Corporate Credit Union Stabilization Fund has dropped into the negative range, which should mean no more assessments at all and a possible rebate in the future.

In its announcement Tuesday, NCUA said the upper range for its projection of future assessments declined $2.2 billion in the second half of 2013, dropping to a range of negative $2 billion and negative $600 million by Dec. 31.

That's down from a negative $200 million to $1.6 billion reported in the second quarter of 2013, and probably points to at least a partial rebate of assessments paid when the fund expires in 2021.

NCUA Chairman Debbie Matz said the more than $1.75 billion in recoveries from the agency's litigation against the sellers of faulty mortgage-backed securities to corporate credit unions is bringing relief to credit unions.

Between the improving economy and the agency's success in managing losses from corporate failures, she said, NCUA is "hopeful that we will not need to make future credit union assessments."

NAFCU has strongly urged an end to future assessments and for a rebate to insured credit unions. It is also urging the agency to be more transparent on what portion of settlements won in litigation are being applied against stabilization costs, and related legal costs.