ALEXANDRIA, Va.--NCUA has updated information on the costs of its Corporate Resolution Program and the performance of its NCUA Guaranteed Notes Program.
According to NCUA, lower ends of the projected Stabilization Fund assessment range remain negative, from a negative $2.2 billion to a negative $200 million. “It is unlikely credit unions will be charged future assessments as long as the projected assessment range stays in negative territory,” the agency said, adding that the projections are subject to change based on the performance of the failed corporates’ legacy assets, future legal recoveries and economic variables such as interest rates, unemployment and housing costs.
“The fact that the assessment range is a double negative is a positive for credit unions,” NCUA Board Chairman Debbie Matz said in a statement. “We’ve come a long way since 2010, when the assessment projections ranged as high as $9.2 billion, but we have more work to do. Our efforts to hold accountable those Wall Street firms responsible for the corporate crisis continue, and we must continue to effectively manage the Stabilization Fund.”
NCUA reported that credit unions have paid $4.8 billion in assessments since the creation of the Stabilization Fund in 2009. It is scheduled to expire in 2021. Matz noted NCUA is still obligated to repay $2.6 billion in outstanding borrowings from the U.S. Treasury. Principal and interest on the NCUA Guaranteed Notes, as well as other obligations of the Stabilization Fund, also must be fully repaid before NCUA can distribute any remaining funds to credit unions. NCUA uses BlackRock, an independent securities valuation firm, to project the future performance of the legacy assets in the Guaranteed Notes, a key component of this analysis.