Assessment Prepayment Plan Gets Tepid Support
Credit unions and their trade groups appear to be voicing support for the NCUA plan to allow credit unions to prepay some of the cost of the bailout of corporate credit unions.
But, in a statement, CUNA President/CEO Bill Cheney said that while CUNA supports the plan, he believes the NCUA did not go far enough in revamping the initial proposal to reflect industry concerns.
Besides increasing the proposed cap from $300 million to $500 million, the plan approved by the NCUA increases the maximum participation amount from 0.36% to 0.48% of insured shares as of March 31, 2011.
But, while touting the benefits of the assessments in 2011 and 2012, NCUA officials did imply that additional assessments, and perhaps prepayment incentives, remain in the credit union industry’s future.
Other changes in the proposed plan include making a commitment to credit unions that the board will use all of the funds received from the voluntary prepayments to a dollar-for-dollar decrease in 2011 and 2012 assessments.
The agency said it raised the target level for the program to $500 million as the price of making the commitment to use all funds from the voluntary prepayments for a dollar-for-dollar decrease in assessments over the next two years.