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<p>ALEXANDRIA, Va.-While NCUA Chairman Dennis Dollar made it clear that he had the authority to act on agenda items at the January Board meeting, he explained that he felt it inappropriate to cast any votes as the lone board member. The Bush administration has yet to make recess appointments for Iowa State Senator JoAnn Johnson or UN Official Deborah Matz to replace unseated Board Members Yolanda Wheat and Geoff Bacino. Dollar clarified that he would make policy decisions should an emergency arise. “I did want to make it clear that we are proceeding on with our job and responsibilities,” Dollar said. While the board meeting did not promise much with just one agenda item-following the tabling of three community charter conversion requests, a Wisconsin member business lending rule, and a clarification on a national field of membership for a corporate credit union-NCUA Chief Financial Officer Dennis Winans announced that NCUA would probably not be granting a dividend for credit unions from the National Credit Union Share Insurance Fund (NCUSIF). The announcement was made during the newly reinstated insurance fund reports to be held quarterly. Winans welcomed the reinstatement of the NCUSIF report, commenting that he had, in the past, “received many positive comments both, internal and external” on the reports. NCUA recorded no insurance losses for 2001 as it has for seven years running. However, the operating level of the fund fell just below the 1.3% floor set by the NCUA Board at a projected 1.2672%. Winans explained that for those who would argue that was because of the increased 66.72% overhead transfer rate, the equity ratio would still only be 1.2728%, a negligible difference. He instead said that the blame for the lower equity ratio could be placed on the large influx of insured shares in the second half of the year and lowered earnings from investments. Winans said that the NCUA Board would not likely assess a premium unless the level fell below the statutory 1.2%, which it remains well above, he pointed out. He added that not providing a dividend is neither a good or a bad thing. “Nobody could have predicted the events of this year which ultimately resulted in such a high influx of shares combined with low earnings which gets us to the 1.27%. Obviously, we would love to see a dividend come out of NCUA, but the most important point is that the fund remains rock solid,” NAFCU Communications Manager John Zimmerman said. “That’s the reality of the marketplace.I can’t say that what NCUA has indicated is unexpected,” CUNA Senior Vice President and Associate General Counsel Kathy Thompson said. She added that it was important for NCUA to get the word out now to credit unions that they would not be receiving a dividend so they would not be expecting it in March. For fiscal year 2002, NCUA predicted a 1.32% equity ratio, potentially allowing once again for a dividend to be paid out to credit unions. The Credit Union Membership Access Act required, beginning with the FY 2000 dividend, the agency base its operating level on actual numbers rather than year-end projections. Therefore the numbers will not be set in stone until probably the end of February when the year-end 2001 5300 Call Reports come in. The agency had budgeted for a $188.1 million net income last year, but came up short at $164.1 million, again due to decreased earnings on investments. In 2000, the NCUSIF made more than $204 million. The report showed a slight increase in the number of CAMEL 4 and 5 credit unions as well as the insured shares for those credit unions. In 2001, there were 206 `troubled’ credit unions, up slightly from the 202 recorded in 2000. The shares in the credit unions increased from 0.4% of insured shares in 2000 to 0.45% in 2001, according to NCUA data. “The difference is so minor.I don’t see any significance in that,” Winans said. However, the number of failed credit unions dropped from 29 in 2000 to 22 in 2001, which cost $6.2 million. Winans credited upgrades to NCUA’s examination program with better management of the troubled credit unions. He said the use of the laptops for improved work environment and better communication, combined with a strong economy in recent years helps bring it all together. [email protected]</p>

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