ALEXANDRIA, Va. — The NCUA Board on Thursday approved a 0.08%assessment to federally insured credit unions for the 2013Temporary Corporate Credit Union Stabilization Fund.

Those eight basis points, representing the lowest end of theNCUA's estimate of eight to 11 basis points announced in November2012, will generate at least $700.9 million when the funds arecollected in October, the agency said.

Also Thursday:
NCUA Shrinks 2013 Budget

It is the lowest corporate assessment on credit unions since making their firstpayment in 2009.

According to the NCUA's Board Action Memorandum, the agency willapply $650 million toward payment on outstanding borrowings to theU.S. Treasury, which will reduce the total amount outstanding tonot more than $4.075 billion.

The payment will increase the NCUA's available credit line to$1.925 billion which would cover unexpected contingencies for bothcorporate stabilization and the National Credit Union ShareInsurance Fund.

After applying the 2013 assessment, the NCUA estimates theremaining corporate stabilization assessments range from $900million to $3.2 billion.

Larry Fazio, director of the Office of Examination andInsurance, told Chairman Debbie Matz and Board Member MichaelFryzel that as the range decreases and narrows, the NCUA “could getto a point where it looks like the performance has improved enoughthat future boards my choose to slow down or discontinueassessments for a time.”

However, Fazio said, that decision will take into accountremaining Treasury borrowings and the overall still-negative netposition of the corporate stabilization fund.

The assessment will drop the aggregate return on average assetsfor federally insured credit unions from 0.83% to 0.76%, and cause328 of them to become unprofitable. Aggregate net worth will dropfrom 10.31% to 10.25%.

Additionally, 31 credit unions will see their net worth dropbelow 7%, subjecting them to the earnings retention requirement ofPrompt Corrective Action. Eight credit unions will see their networth drop below 6%, forcing them to file a net worth restorationplan. However, no credit union will drop below 2% net worth, theNCUA said.

Although the NCUA will invoice the assessment in September to bedue by mid-October, credit unions should expense the assessment inJuly and report the entire expense on their Sept. 30 Call Report,the NCUA said in its board memo.