The Credit Union National Association (CUNA) is advocating for an exit fee to be paid by credit unions that convert either to a mutual savings bank charter or private insurance.
CUNA contends that these institutions should be required to pay their fair share of the future Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessments.
However, NCUA does not believe it has the authority to assess an exit fee. In an August 29 letter to the National Association of State Credit Union Supervisors, NCUA wrote that legislative language creating the TCCUSF stated that premiums charged shall be stated as a percentage of insured shares and the premium rate will be identical for each credit union.
The legislation is silent on the issue of an exit fee.
If Congress intended for converting credit unions to pay an exit fee, it would have included the language in the statute.
There is precedent. In 1989, Congress explicitly stated that a financial institution leaving the Savings Association Insurance Fund (SAIF) for the Bank Insurance Fund (BIF) would be subject to an exit fee. (See Section 206 of the Financial Institution Recovery, Reform, and Enforcement Act of 1989.)
The fact that Congress omitted such language in the legislation creating the TCCUSF means Congress did not intend for converting credit unions to pay for the TCCUSF.
About Me
- Keith Leggett
- Dr. Keith Leggett is retired from the American Bankers Association, where he was a Senior Vice President & Senior Economist. He is a leading expert on credit unions and the National Credit Union Administration.
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