NCUA officials say the agency's proposed plan to accept voluntary prepayment of insurance assessments to help pay for the costs of the corporate stabilization plan came from industry executives.
Larry Fazio, the agency’s deputy executive director, said in a conference call with reporters Friday that the NCUA had looked at putting place a mandatory prepayment plan akin to one put into place by the FDIC for banks, but had concluded that it lacked the authority.
Nonetheless, Fazio said that NCUA officials had been approached consistently by industry figures at public events that were looking for a prepayment opportunity.
Fazio described the agency's early input into the question as falling into two camps.
The first were executives who favored a prepayment opportunity as a way of getting the corporate stabilization costs paid and the problem behind them, while the second camp were looking for a way to better manage the annual costs of the recovery measure.
A prepayment plan, assuming enough CUs wanted to participate, would appear to benefit both camps, Fazio said.
He said the proposed program's essential financial calculation as being one of paying the costs of the assessments now, when credit unions generally have lot of liquidity and when interest rates on investment are at near record lows.
The opportunity costs of making such a prepayment now would be very low, he said.
Fazio and other officials stressed that a minimum number of CUs would have to participate for the program to launch. If not enough CUs participated, no money would be accepted, he said.