NCUA Slated to Discuss Assessment and Chartering Rules
At next Thursday's board meeting the NCUA plants to announce the amount and due date of the assessment that credit unions will have to pay to enable the NCUA to pay back the loan from the Treasury Department that created the Temporary Corporate Credit Union Stabilization Fund.
The agency has said the amount will be affected by the timing and amount of bond defaults within corporate credit unions, with current estimates calling for $7.6 billion in defaults over the next two years. The stabilization fund has $6.4 billion set aside for current estimates of losses that would be incurred by the fund over the life of the securities, and must repay the Treasury Department $690 million in outstanding borrowings. Congress gave the NCUA a $6 billion line of credit last year but the agency has only used $1 billion to date.
The NCUA Board is also slated to vote on final rules to revamp the approval process for community chartering. The agency's original proposal designates a well-defined local community as one having 2.5 million or fewer people and having a core area containing 50% of the jobs and 33% of the population. It would define a rural district as a contiguous area in which more than 50% of the population lives in rural areas and the area's population doesn't exceed 100,000.
Those are among the provisions that were criticized by national and state trade associations and several executives of natural person credit unions during the comment period. Most of the comments maintained that proposed size of the community is too small, the definition of rural is too arbitrary and the requirements on marketing plans are too burdensome
NCUA Chief Financial Officer Mary Ann Woodson is scheduled to give the NCUA Board a report on the health of the NCUSIF.
The meeting will be held at 10:00 a.m. at the agency's headquarters in Alexandria, Va.