Corporate Assessment Projections Improve
The NCUA said on Tuesday the total current projected range for future remaining assessments is now between negative $2 billion and negative $600 million.
There will likely be no need for future assessments if both ends of the projected range of net remaining assessments stay negative, the agency also said.
The range was negative $200 million to $1.6 billion at the end of the second quarter of 2013.
“The overall rate of change in the assessment range is consistent with recent trends, and the continued improvement in the performance of the legacy assets underlying the NCUA Guaranteed Note program,” said an NCUA press release on Tuesday.
With the help of the JPMorgan Chase settlement in November 2013, total projected assessments associated with the temporary corporate credit union stabilization fund declined $2.2 billion at the upper end between July and December of last year.
“The more than $1.75 billion in recoveries from NCUA’s litigation has certainly brought relief to credit unions, but it’s also good to see the general trends continuing,” NCUA Board Chairman Debbie Matz said in a statement. “An improving economy and NCUA’s continuing efforts to effectively manage losses from the corporate failures at this time make us hopeful that we will not need to make future credit union assessments.”
The corporate stabilization fund is set to expire in 2021. Credit unions have paid $4.8 billion in assessments since it was created in 2009. Any corporate assessment rebates paid by federally insured credit unions wouldn't be returned until the stabilization fund's expiration in 2021, the NCUA has said.
The NCUA has $2.9 billion in outstanding borrowings from the U.S. Treasury associated with the corporate credit union resolution.