NCUA Says it May Not Assess NCUSIF Premium (Misc News: February 21, 2011)
Just days after MCUL & Affiliates CEO David Adams called on the NCUA to reduce its planned assessment for the NCUSIF, the agency said it may not need to assess a premium for the fund in 2011.
CUNA News Now reported Melinda Love, the NCUA’s direct of the Office of Examination and Insurance, told a virtual town hall meeting last week that the agency is delaying the NCUSIF assessment as long as possible. She added that if there is a NCUSIF premium, it will be released in the fall.
Last year, the agency transferred $54.8 million from the NCUSIF last year as an insurance loss expense late last year. The NCUSIF reserve balance stands at $1.26 billion.
In his letter to NCUA Chair Debbie Matz, Adams said that with debit interchange possibly taking away as much as 70 percent of credit unions’ income, the NCUA should allow the NCUSIF reserve ratio to fall below prescribed levels to help revitalize the economy.
“I recognize that the NCUA Board is charged with safeguarding the NCUSIF with a strong reserve ratio,” Adams wrote. “But I also believe that the health and vitality of credit unions is critically important for the long-term health of the fund.”
Adams suggested that the NCUA adopt the approach taken by the FDIC that it is using to restore its Deposit Reserve Ratio. He said the FDIC is using a patient approach to restore its DDR over a 10-year period.
Click here to read Adams letter.
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