More on TCCUSF Assessment

As reported earlier today, the 2012 Temporary Corporate Credit Union Stabilization Fund Assessment will be 9.5 basis points. The assessment will be based upon insured shares as of June 30, 2012 and will be payable on October 9, 2012.

According to NCUA staff analysis, the 9.5 basis point assessment will lower the annualized return on average assets by 8 basis points to 0.81 percent, based upon March financial data.

NCUA is estimating that 335 federally-insured credit unions will become unprofitable due to the assessment. It is expected that 123 credit unions with less than $10 million in assets will become unprofitable; 179 credit unions with assets between $10 million and $100 million will slip from being profitable to unprofitable; and 33 credit unions with more than $100 million in assets will become unprofitable.

Additionally, NCUA expects the net worth ratio for the industry to slip from 10.01 percent to 9.96 percent.

NCUA expects that 46 federally-insured credit unions will see their net worth ratio fall from above 7 percent to below 7 percent subjecting them to an earnings retention requirement. Fifteen credit unions will see their net worth ratio fall below 6 percent, requiring them to prepare a net worth restoration plan and one credit union is expected to become critically undercapitalized with a net worth ratio falling below 2 percent.

NCUA did announce that there would not be an NCUSIF premium for 2012 -- the second year in a row without a NCUSIF premium assessment.

In addition, the NCUA Board authorized the Executive Director to borrow up to $2.5 billion from Treasury for the TCCUSF. However, staff expects borrowing needs to equal $1.87 billion.