ALEXANDRIA, Va.—The economic rebound hasn’t just goosed CU loan portfolios, its improved the performance of the legacy assets underlying NCUA’s Temporary Corporate Credit Union Stabilization Fund.
But CUs shouldn’t be looking for any refund on the assessments they paid to compensate for the corporate losses until at least 2021. That’s because credit unions are not first in line to recover funds.
During the NCUA board meeting today, NCUA staff noted the Stabilization Fund has recorded net income of $332 million to date as the securities being held by NCUA continue to improve. The agency has also seen expense reductions due to improved cash flows, as well as a significant number of settlements from the 16 lawsuits the agency has filed against various Wall Street banks and securities firms over the sale of those securities. It has recovered $1.75 billion from those firms to date.
Among those in line ahead of credit unions is the Treasury Department. NCUA still has an outstanding loan of $2.6 billion that needs to be repaid. Behind the Treasury are the holders of the NCUA Guaranteed Notes (NGNs).
When NCUA’s CFO Mary Ann Woodson was asked by Chairman Debbie Matz when credit unions might see some return on the assessments paid, Woodson, who is retiring and was attending her last NCUA meeting, said, “After 2021. Perhaps.”
As a result of the strong performance NCUA said, as expected, it is not expecting any additional corporate assessment during 2015. Similarly, it also does not expect any 2015 premium for the NCUSIF, as the equity ratio is expected to remain at the mandated 1.30%.
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