ALEXANDRIA, Va. — There is a good chance that the reserves set aside for losses in the NCUSIF "won't be sufficient," to cover the losses at some of the large credit unions, NCUA Office of Examination and Insurance Director Melinda Love told the NCUA Board last Thursday.
And Deputy Executive Director Larry Fazio told the board that the health of the Temporary Corporate Credit Union Stabilization Fund will be hurt by bond defaults within corporate credit unions of $7.6 billion during the next two years. The fund has $6.4 billion set aside for losses for this year and must repay the Treasury Department $690 million over the next six years. The department gave the NCUA a $3 billion line of credit last year, but the agency has used only $690 million.
NCUA Board Member Michael Fryzel raised the possibility of extending the repayment period to 10 years, and Fazio said that could only be done with the approval of the Treasury secretary.
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