Trades Ask NCUA to Dial Back NCUSIF Equity Level
CUNA has written NCUA Board Chairman Debbie Matz to ask the agency to temporarily reduce the normal operating level for the NCUSIF from 1.3% of insured shares to 1.2%.
"CUNA is proposing that NCUA take steps that will help credit unions mitigate and manage their insurance costs, wrote CUNA CEO Dan Mica. "One is to reduce temporarily the normal operating level of the NCUSIF from the current 1.3% to no lower than 1.2%, the floor established for the Fund in the FCU Act. While insured credit unions must maintain a deposit with the NCUSIF equal to 1% of their insured shares, slightly reducing the target level for the Fund's retained earnings will potentially reduce credit unions' insurance payments over the next few years," he wrote.
"As we are proposing it, such a downward adjustment would only be for a predetermined period of time, set by the NCUA," Mica added. "Currently, the Fund is operating at around 1.24%, and we do not think the NCUSIF would be jeopardized if the normal operating level is set for a relatively short period of time closer to that level.
NAFCU wrote a letter last December similarly stating, "We believe that keeping the operating level at its current level [1.3%], without at a minimum, additional public consideration of the operating level policy, could impact the financial health of many credit union unnecessarily."