NCUA Board Sets 2007 NCUSIF Operating Level; CUs Could See 2006 Dividend
ALEXANDRIA, Va. -- The NCUA Board last week voted unanimously to maintain the 1.3% operating level for the NCUSIF into 2007.
When the NCUSIF equity ratio exceeds the ratio set by the board--statutorily required between 1.2% and 1.5%, NCUA returns a dividend to federally insured credit unions, which finance the insurance fund. This year, NCUA Chief Financial Officer Dennis Winans forecast the equity ratio to reach 1.31% by year-end, meaning a dividend to federally insured credit unions is likely. He gave an estimated range of $105 million to $150 million, or 2-2.5% per credit unions' 1% deposit. He said he would have a better idea when fourth quarter call reports could be analyzed and possibly bring the potential dividend to the board in February.
The agency said it also expected 2007 to end with a 1.31% equity ratio.
The future losses to the insurance fund look to be trending downward. As of Nov. 30, NCUA counted only 252 CAMEL 4/5 credit unions compared to 280 at year-end 2005. These troubled credit unions account for less than 1% of total insured shares. Additionally, 14 credit unions failed this year versus 15 last year, amounting to losses of $4 million and $16.2 million respectively. --firstname.lastname@example.org