$736 Million Share Insurance Distribution Payments to Occur Week of July 23
The National Credit Union Administration (NCUA) announced this week that, starting next week, they will pay dividends for more than 5,700 institutions eligible for the $735.7 million Share Insurance distribution.
The agency said statements will be mailed to dividend recipients this week, indicating the amounts they’ll receive. An institution that filed a quarterly Call Report as a federally-insured credit union for at least one reporting period in calendar year 2017 will be eligible for a pro rata distribution. The NCUA board approved a final rule at its February 2018 meeting that details eligibility criteria.
“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.”
The NCUA Board gave unanimous approval to the distribution at its February 2018 open meeting. The distribution was possible after the board voted unanimously at its September 2017 open meeting to close the Temporary Corporate Credit Union Stabilization Fund and transfer the Stabilization Fund’s assets and obligations to the National Credit Union Share Insurance Fund, as required by law.
Credit Union National Association (CUNA) President/CEO Jim Nussle commended the NCUA Board for its decision, calling it a victory for credit unions.
"CUNA was the only national trade association advocating for refunds to begin in 2018, and more than 90% of credit unions who commented on NCUA’s proposal supported our position. Credit unions look forward to getting their money back and putting it to work for their members," continued Nussle.
More information on the Share Insurance distribution, including the method the NCUA used to determine each institution’s share, can be found online here. Information about the Stabilization Fund closure, the transfer of assets and obligations to the Share Insurance Fund and setting the Share Insurance Fund’s normal operating level at 1.39 percent are all available here.
Prior to the board’s actions in September 2017 and February 2018, the Stabilization Fund was scheduled to expire in 2021. Net legal recoveries of more than $3.8 billion won by the NCUA on behalf of five failed corporate credit unions decreased the costs to the Stabilization Fund and made funds available for this distribution.
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