Dateline Washington

* According to CUNA at press time, an attempt to add CU-supported bankruptcy reform legislation to crop insurance legislation failed because of a dispute over homestead exemptions. * Strong preliminary NCUA first quarter figures for FICUs over $50 million in assets, released May 24, indicated that the number of FICUs grew by 52 over last year's first quarter totals to 1,506 and that these institutions now represent 14% of all credit unions and 79% of total CU assets. As of March 31, the capital ratio of these FICUs stood at 11.1% and net capital was 10.5%. In addition, "large" FICU assets increased in the first quarter by 3.2%, from $323.5 to $334 billion; loans grew by 2%, from $215.1 to $219.4 billion; savings went up by 4% to $291.9 billion from $280.7 billion; and the delinquency ratio declined from 0.6% to 0.5%. The loan-to-share ratio decreased from 76.6% to 75.1%, the agency said. The most significant gain, according to NCUA, was in the area of share drafts, which grew by 11.7% in the first quarter; while investments grew by 7% to $84.4 billion. NCUA also said that the largest category of loans-first mortgage real estate loans-slowed its rate of first quarter growth over last year's from 4.8% to 2.1%, but that the actual dollar amount increased from $63.1 billion to $64.4 billion. First quarter figures for new auto loans, however, increased over last quarter's by 2.8%-up to $40.3 billion from $39.2 billion. And first quarter used auto loans increased by 3.2% over last quarter's to $41.1 billion from $39.8 billion. First quarter deposits in corporate credit unions, the agency said, increased a significant 16.7%, up from $13.8 billion to $16.2 billion. * It's time to rethink and recreate the National Credit Union Share Insurance Fund (NCUSIF), said Callahan and Associates President Chip Filson, into something that better reflects the cooperative structure of the credit union system and the stability of CUs. While no insurance losses have been charged to the P&L for the past five years, the NCUA has "routinely charged 50% and more of its total operating expenses to the fund," said Filson. That figure now stands at some $254 million for NCUA "administration" in that same timeframe. The 2000 budget is projected at $60 million. Since 1985 (when the fund was capitalized) the agency's operating expenses charged to the fund have risen from $10.8 million to $58.4 million, a 535% increase. This escalation comes at a time when the number of federally insured credit unions has declined by 7,000 over 20 years; yet the cost of a CU's insurance has risen from $726 in 1985 to $5,494 in 1999, an increase of 756%, said Filson. "The role of the NCUSIF has shifted from funding insurance activities to underwriting the operating costs of the federal charter. In essence, the state charters are providing a subsidy to the federal system," Filson concludes. Because NCUA is an independent agency and does not have to answer to any congressional or executive authority, there is no oversight or control of how CU insurance funds are spent.