NCUA Board Split on Odds of Corporate Rebate
For the first time, two NCUA board members said credit unions would likely receive a rebate from the stabilization fund after 2021.
A third board member, however, is not as optimistic.
“If our Guaranteed Notes continue to out-perform projections, and if NCUA continues to secure recoveries from litigation and settlements, NCUA will likely be able to provide a rebate after 2021,” NCUA Chairman Debbie Matz told Credit Union Times Thursday.
The NCUA announced Feb. 12 that the remaining projected corporate assessment range currently runs from negative $1.9 billion to negative $400 million. That means, the agency said, future corporate assessments are unlikely, as long as both ends of the range remain negative.
Board Member Rick Metsger was even more optimistic about a potential corporate assessment rebate.
“There is a strong likelihood that in a number of years, certainly when this chapter closes in 2021, that is a real possibility,” he said on Thursday.
“We always have to prepare for contingencies. We don’t know what the economic climate is going to be for the next six years, but the direction is moving in a positive way,” he added.
However, Board Member Michael Fryzel, who originally worked with Congress and the U.S. Treasury to create the corporate stabilization fund, said credit unions should not anticipate receiving any rebates.
“From day one, I’ve always said that credit unions should not look forward to receiving any money back. Now as time goes on, again this is a point of time that we look at these numbers and we say, ‘okay, things are going well, and conceivably there may not have to be any more assessments,’” he said on Thursday.
“All this would then be paid off and maybe, maybe – sometime a long way into the future – there may be some money that’s still in the fund that we don’t have to use any more, and it will go back to credit unions. I don’t think they should anticipate ever receiving anything back,” he added.