When the NCUA announces the NCUSIF assessment to cover losses at natural person credit unions in September, it will probably be between six and 10 basis points of insured shares, according to CUNA Chief Economist Bill Hampel.
CUNA based its prediction on several recent developments, including a negative ROA during the fourth quarter of 2009, though that improved during the first quarter of 2010. However, the NCUA's decision to place the $800 million Arrowhead Credit Union into conservatorship and the closing of the $200 million St. Paul Croatian FCU have also put strains on the NCUSIF.
The analysis sets up three possible scenarios. A "base case," in which credit union losses are $1.2 billion; an "optimistic case," which would be based on losses of $700 billion; and a "pessimistic case," in which losses totaled $2.2 billion. The NCUSIF has already expensed $1.1 billion for insurance losses. If the last scenario occurred, the NCUA would have to levy a premium of 15 basis points next year.
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