The dividend was possible because the agency merged the share insurance fund and the corporate stabilization fund.

Under federal law, the stabilization fund was used to provide the agency with the ability to mitigate costs from stabilizing the corporate credit union system.

The distribution is possible because the agency has repaid all loans from the federal government and because, as a result of the fund closing, the share insurance fund's equity ratio is 1.46%–above the 1.39% the board set last year.

However, NCUA officials also warned that if the two funds had not been merged, a premium charge of $1.3 billion would have been needed because the equity ratio would have dropped to 1.18%.

Before the board took action to merge the funds, the stabilization fund was scheduled to expire in 2021. However, legal recoveries won by the NCUA on behalf of five failed credit unions decreased the costs to the stabilization fund and made it possible for the agency to provide the dividend.

"The NCUA's prudent management of the corporate resolution process provided the ability to close the Stabilization Fund four years early," NCUA Board Chairman J. Mark McWatters said. "Through a collaborative, bipartisan process among the Board members and a great deal of diligent work by staff, the NCUA has been able to avoid a premium assessment and safely distribute funds to credit unions that can be put to work building local communities, creating new businesses, and improving the lives of members across the country while advancing the objectives of protecting member deposits and maintaining a safe and sound credit union system."

"As we have noted before, this is the largest Share Insurance distribution in this agency's history," Board Member Rick Metsger said, "larger, even, than the cumulative amount of all previous cash distributions since the Share Insurance Fund was capitalized. This is a significant benefit to credit unions and will support a lot of provident and productive purposes."