Corporate One Federal Credit Union on Friday announced its board of directors had voted to participate in the NCUA’s Voluntary Prepayment Assessment Program, which the federal regulator created to help credit unions manage their contributions to mandated corporate stabilization assessment programs.
The board specifically instructed Columbus, Oho-based Corporate One to contribute the maximum permitted under NCUA’s guidelines.
NCUA had set a program goal of $500 million, and it also created a funding formula that set out maximum contributions as a percentage of insured shares in a federally insured credit union - specifically, NCUA pegged the maximum amount any credit union could pre-pay at 0.48 percent (48 basis points) of March 31, 2011, insured shares.
Corporate One’s decision was announced at the deadline for filing program agreements with NCUA.
Paul Hixon, a Corporate One vice president, elaborated that “our contribution into the prepayment assessment fund is $604,553. Because we have higher assets relative to our number of members and their total amount of insured deposits, that number may seem low to natural person credit unions with thousands of members and much more in insured deposits. That's why the board voted for the maximum amount we could contribute.”
In announcing the decision, Corporate One CEO Lee Butke said in a statement: “Our board was resolute in the fact that since Corporate One is in a strong financial condition, we should absolutely do what we can to help our member credit unions manage their 2011 and 2012 assessments, especially at a time when so many are experiencing challenging economic times. We support the NCUA’s efforts to help credit unions better manage these assessments, and we’re proud to be able to help them smooth out those costs.”
The NCUA said it will announce on Aug. 9 whether it has received the $500 million in commitments needed for the prepayment program to go forward. Its board will hold a special meeting on Aug. 29 to announce the assessments to credit unions to pay off part of the loan that the Temporary Corporate Credit Union Stabilization Fund took out from the Treasury Department.