As a result of the sluggish economy, 5.13% of all insured sharesare in credit unions with CAMEL 4 or 5 ratings, and there are 326credit unions with such ratings, NCUA Chief Financial Officer MaryAnn Woodson told the NCUA Board last Thursday.
Those credit unions represent about $36.5 billion in assets. Bycontrast, at the end of December there were 271 credit unions withthose ratings.
In addition, there are 1,634 credit unions with CAMEL 3 ratings,compared with 1,540 at the end of last December.
In response to a question from NCUA Chairman Debbie Matz, Woodsonsaid the agency has been steadily building up the reserves of theNCUSIF to prepare for paying out additional funds.
Woodson said that the fund had a reserve balance of $520.8 millionat the end of September and $19 billion in assets at the end ofSeptember. Its equity ratio was unchanged at 1.3%.
There have been 21 credit union failures through Sept. 30, 11 wereinvoluntary liquidations and 10 were assisted mergers. By contrast,there were 18 credit union failures in 2008.
The Temporary Corporate Stabilization Fund, which Congress createdin July at the request of the NCUA and the credit union tradeassociations following the agency's placing U.S. Central andWestern Corporate Federal Credit Unions into conservatorship, has$1.3 billion in assets and $6.36 billion in estimated liabilities.This includes a $1 billion capital note for U.S. Central as aresult of the money the agency injected into the troubled corporateearlier this year. The rest is made up of $5.33 billion set asidefor corporate CU losses, a $1.3 million interest payment owed theU.S. Treasury and $30 million in deferred revenue.
Congress allowed the fund to operate with a deficit to give theagency the flexibility to respond to problems of corporate creditunions.
The board also approved a final rule outlining the details of theincrease in the maximum share insurance amount from $100,000 to$250,000 through the end of 2013. NCUA Staff Attorney FrankKressman explained that the rule made permanent the requirementthat credit unions display signs signifying the amount that isinsured. He also said the agency will encourage credit unions toinform members with more than $250,000 in any account about ways tostructure their accounts to ensure that they are adequatelyinsured.
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