<p>WASHINGTON – NAFCU has begun to lobby Congress to lower the equity ratio range in which NCUA must set the normal operating level for the NCUSIF each year. Currently the NCUSIF must maintain, under federal statute, an equity ratio of between 1.2 and 1.5%. This has been defined in the statute as the normal operating level for the NCUSIF and, when the ratio drops below that level NCUA must levy a premium on all federally insured credit unions. The FDIC maintains a similar ratio, called the fixed designated reserve ratio, and the proposed FDIC reform package would lower that range to between 1.0 and 1.5%. NAFCU has proposed parity between the ranges for the FDIC and NCUSIF and has put its lobbying in that context. "What we want is the parity," said John Zimmerman, NAFCU public relations manager, although Zimmerman agreed that the practical effect of parity will be to lower the operating level range. The proposed FDIC reform package raises the limit on insured accounts from $100,000 to $130,000 for both banks and credit unions and would index the insurance coverage to inflation. The measure would also double the insurance coverage for retirement accounts and would merge the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF). Overall NAFCU reports being generally satisfied with the proposed measure that, it argues, credit unions should praise as much for what it does not contain as for what it does. "We think credit unions should breath a sigh of relief that the NCUSIF was not merged into the FDIC at the time when the two FDIC funds were merged," said Bill Donovan, NAFCU vice president. "There have been suggestions over the years for doing that and, from one perspective, it could seem very easy, since you are merging insurance funds to achieve economies of scale, that you might merge the NCUSIF into an FDIC fund as well." NAFCU acknowledged that no legislator had actually proposed merging the NCUSIF into the broader insurance funds, but pointed to that as a victory as well, remembering a time when such a suggestion could have been expected. "There were some suggestions as late as last year, ill-advised in my opinion, to change the way the NCUSIF is managed at the same time the FDIC was changed," said Fred Becker, NAFCU President/CEO. "This year that never really came up in talking about the proposal." Becker also pointed out that simply setting out to change a statute does not guarantee that the changes received will be the changes desired. "When you change a statute you don't always get what you want," Becker said, although he acknowledged that, in some circumstances, credit unions have to take that risk.</p>

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