ARLINGTON, Va. – Senior trade association economists said the rising tide of credit unions' insured account balances in the wake of the stock market's downturns and general economic uncertainty increases the possibility that the National Credit Union Share Insurance Fund (NCUSIF) will have to assess a premium on federally insured credit unions to cover the increase. But Dennis Winans, NCUA's chief financial officer doubted the NCUSIF's share equity ratio would fall to below 1.2%, the trigger set in law for when the Fund must assess a premium. "I think it's still too early to make that assessment," Winans said, although he admitted that the growth in insured funds could approach last year's 13.8% rate and put pressure on the equity ratio. The ratio hit 1.25% in 2001, Winan's said. The "flight to safety" among credit union members seeking to protect their balances in uncertain economic times had been what fueled the earlier insured share increase. At the time, Winans noted that many economists expected the economy to take an upward swing towards the middle of 2002. An improvement in the economy would raise interest rates and draw money out of credit union savings accounts, he argued. "Historically we have seen a sharp drop off in savings during the year following a heavy savings year," Winans said. "I based my forecast on those historic trends," he then added. But now he admits that the forecasted economic uptick had not occurred and that the growth in insured shares might continue for the balance of 2002. Contacted on the road, Bill Hampel, CUNA's senior economist, said he had not "run the figures" recently enough to make a definitive statement about the likelihood of a premium, but he said the "it would not be inconceivable" that the fund would need a boost. He also stuck with his previous assessment that the NCUSIF would almost certainly not be able to provide a premium this year. CUNA economist Steve Rick said that he had moved his estimate of the growth in 2002 insured shares from 11%, his figure at the beginning of the year, to between 11%-13% now, and Tun Wai, NAFCU senior economist, estimated that the figures would show that the fund is "right on the balance" of needing to assess a premium. Wai said that a lot would depend on what the June call reports would show about the rate of increase in insured shares. He had also bumped up his estimate to 11% or 12%, he added. Wai said he had been cautioning credit unions to look past the rise in the insured shares to a time when the money starts to flow out again. It's easy in times of extended savings growth to get used to having the money there, he explained. Credit unions need to be aware that the economic situation will change, he added. Part of the pressure on the Fund comes from the diminishing returns the invested resources bring, Winans added. The Fund has not lost any money, Winans said, but he conceded that the returns were not as good as they had been. [email protected]