NAFCU and CUNA praised the NCUA for the $1.4 billion settlement with JP Morgan announced on Tuesday and called for the NCUA to respond by lowering or eliminating the corporate assessments credit unions now pay the agency.
“We applaud NCUA’s persistence in seeking recoveries on the sale of faulty securities that led to the downfall of five corporate credit unions," said NAFCU President/CEO Dan Berger.
Also Read: JP Morgan, NCUA Settle for $1.4 Billion
"Today's announcement by NCUA is a momentous one, representing the first significant financial relief for credit unions that have been operating under the weight of corporate stabilization since 2009,” Berger said.
The assessment for the corporate stabilization fund is on the agenda at the NCUA’s November meeting on Thursday.
“We appreciate NCUA's dogged pursuit of the recoveries it has made thus far, and we strongly encourage the agency to take a close look at these recoveries and consider returning any excess received to insured credit unions,” Berger said.
Berger encouraged the agency to cease stabilization assessments on insured credit unions in light of the resolution.
“This will be an enormous boost for many Main Street credit unions that were struggling under the continuing burden of corporate stabilization assessments. When credit unions can continue to serve their members with low-cost, low-fee products and services, we all win,” he said.
The NCUA portion is part of an overall $13 billion settlement with JP Morgan over failed corporate credit union investments.
CUNA said the settlement gives more weight to setting the TCCUSF projected assessment range for next year at 0% of insured shares – a recommendation it has made in the past.
"The NCUA has taken a strong leadership role in its work to regain costs it says were caused by securities firms that knowingly sold products of questionable value. It must now make sure that the regained funds benefit the credit unions who have carried the cost of those actions," CUNA President/CEO Bill Cheney said Tuesday.