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Recently the National Credit Union Association (NCUA) Board lowered the 2013 Temporary Corporate Credit Union Stabilization Fund assessment to 8 basis points of insured shares, which is1.5 basis points lower than the 2012 assessment. The lower assessment reflects the steadily improving economy, strong legacy assets performance and success with securing legal settlements.
The Temporary Corporate Credit Union Stabilization Fund was created in May 2009 to assist federally insured credit unions across the nation as a result of NCUA borrowing money from the United States Treasury to help bail out credit unions hardest hit by the economic downturn. The NCUA assessed a basis point fee to help fund the repayment within a seven year period.
In Nov. 2012, the NCUA originally announced that the assessment fee would be between 8 to 11 basis points. It will raise an estimated $700.9 million that will be applied towards covering at least $650 million in Stabilization Fund borrowings from the United States Treasury, as well as preserve an adequate cash reserve.
After the 2013 assessment is payment is fulfilled, federally insured credit unions will have paid $4.8 billion in assessments towards the Corporate System Resolution Program. The program was established to support the Stabilization Fund. Projected net remaining assessments over the life of the Stabilization Fund currently range from $900 million to $3.2 billion, with outstanding borrowings totaling no more than $4.075 billion.
With the assessment now determined for 2013, federally insured credit unions should record the expense in July. NCUA’s chief financial officer will prepare and distribute invoices to all federally insured credit unions. The assessment will be due in October.
For more information about the NCUA’s Temporary Corporate Credit Union Stabilization Fund please contact our dedicated Financial Institutions Group, with professionals in Michigan, Houston and Ft. Lauderdale.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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