NCUA Proposes Changes to CLF; Insurance Fund Hurt By Economy
ALEXANDRIA, Va. - U.S. Central's capital position could get some needed relief as a result of today's approval by the NCUA of a Central Liquidity Facility LF proposal to remove CLF-funded notes from the aggregate corporate's books.
The board approved the change 2-1.
U.S.Central would keep its role as the master servicer and the relevant corporates would still service the loans. But the loans would be an asset of the CLF. The corporate servicing the loan would have to make an agreement with USC to subordinate any collateral claims it pledged to secure the CLF loan.
The board also learned that the National Credit Union Share Insurance Fund paid out $227.8 million as a result of credit union failures last year. It had reserves of $278.3 million.
In December, the fund's net income increased $9 million. Its gross income rose $129.5 million because of a sale of treasury notes and money from the corporate credit unions as part of SIP, a program designed to provide assistance to corporates
NCUA Chief Financial Officer Mary Ann Woodson said in an interview after the meeting that the treasury notes sale was "another in a series of contingency oriented moves by the agency to take proactive steps in difficult economic times."
The fund's equity ratio was projected to be 1.27% as the final audit was not completed, she said. Congress requires the equity ratio to be 1.2%-1.5%. The NCUA must levy a premium if the ratio drops to 1.2%.