Becker Calls U.S. Central Losses 'Nothing New'
NAFCU President/CEO Fred Becker downplayed the importance of U.S. Central's fourth quarter $500 million OTTI announcement, which partially impaired the NSUCIF's $1 billion capital note, calling it "nothing new."
Becker told the Credit Union Times retail corporates had already depleted all U.S. Central capital months ago, and the only news is that NCUA's corporate stabilization assessment may rise as a result.
Although Becker said he didn't know for sure, but according to his math, the NCUA accounted for "at least some" loss of the NCUSIF note in five to fifteen basis point corporate assessment estimates mentioned last fall. However, the NAFCU chief said he is pressing the NCUA to "further refine" its assessment estimates to give natural person credit unions time to prepare for the actual number.
Typically, a credit union earns 100 basis points in a year, and credit unions may be looking at a 40 basis points assessment when accounting for both corporate stabilization and restocking the share insurance fund. Becker said such a large share of revenue is a significant budget item, and the NCUA shouldn't drop it on credit unions "like a rock." Rather,the NCUA should provide credit unions with estimate updates.