NCUA today announced the Temporary Corporate Credit Union Stabilization Fund has been extended to June 30, 2021, with the concurrence of Treasury Secretary Timothy F. Geithner. This will provide the NCUA Board with important flexibility in mitigating the impact of the annual assessments to credit unions for the costs over this period.
Deputy Executive Director Larry Fazio told Credit Union Times the option to extend the fund repayment to 2021 was written into the original framework.
"The advantage to spreading it out is that we can synchronize assessments with actual losses," Fazio said. So far, NCUA has assessed $1.3 billion in corporate assessments, and actual losses to date total $1.1 billion. NCUA does not want to publish a schedule of assessments for credit unions, he said, because they would be obligated to write them off immediately to satisfy GAAP accounting.
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However, NCUA will have to deal with some cash management issues in the short run.
Because previously issued corporate debt from WesCorp and U.S. Central comes due in 2012, assessments will rise in 2011 and 2012 before decreasing, Fazio said.
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