NCUA Proposes Liquidation Updates: Onsite Coverage
ALEXANDRIA, Va. – The NCUA board approved a proposed rule on Thursday amending the agency’s current voluntary liquidation regulations. The proposed rule only applies to federal credit unions that seek to voluntarily liquidate.
“We are not encouraging credit unions to liquidate,” said NCUA Chairman Debbie Matz at the board meeting on Thursday.
If finalized, the NCUA said the rule would reduce administrative burdens on federal credit unions and modernize the current rule in multiple ways, including:
- Allowing liquidating federal credit unions to publish required creditor notices in either newspapers or electronic media;
- Specifying that preliminary partial distributions to members cannot exceed insured account balances;
- Raising the asset size threshold for requiring multiple creditor notices;
- Specifying when liquidating federal credit unions have to determine member share balances for the purposes of distributions
- Allowing liquidating federal credit unions to distribute member share payouts electronically, via mail or personal delivery.
Mary Ann Woodson, NCUA chief financial officer, also presented the NCUSIF fourth quarter statistics at the board meeting.
The NCUSIF gross investment income was $198.3 million at the end of 2013. Total income was $202.8 million.
The beginning reserve balance was $412.5 million and the ending balance was $220.7 million.
“I believe that level is adequate,” said Woodson. “We will make adjustments to the reserve level as needed throughout the year.”
The NCUSIF investment balance was $11 billion as of December 31, 2013.
Board Member Michael Fryzel noted that $95 million was transferred to the corporate stabilization fund.
“The transfer is positive for the stabilization fund,” said Woodson.
In March 2013, the NCUSIF equity ratio was 1.31% and 1.30% in December.
Matz congratulated Woodson and her staff for their work on the report, calling it very technical and complex.
“Protecting the Share Insurance Fund is NCUA’s top priority, and the 2013 year-end results reflect the agency’s prudent management and effective approach to regulation,” Matz said. “The metrics continue trending in the right direction. The number of federal credit unions with CAMEL codes 3, 4 and 5 continued to decline, as did the exposure level of potential losses.”
The amount of CAMEL code 3, 4 and 5 credit unions dropped 7.9% to 1,787 at the end of 2013, down from from 1,940 in 2012.