TCCUSF Refund: Not Until After 2021

Although the net remaining assessments range from negative $0.2 billion to $1.6 billion as of the second quarter for the Temporary Corporate Credit Union Stabilization Fund, the transcript from the November 21 NCUA Board meeting indicates that credit unions should not expect a refund anytime soon.

Chairman Debbie Matz: Okay. And for the first time, as you indicated, the range includes a negative number; so will credit unions receive a refund in 2014?

Brian Heitman: No. Even after we make the repayment with settlement proceeds, NCUA will still owe several billion dollars in borrowings to the U.S. Treasury as a result of the Corporate Resolution Program. The Treasury debt must be fully repaid before any remaining funds will be distributed to credit unions. This is not likely to occur prior to expiration of the Stabilization Fund in 2021.

The timing of potential refunds is also contingent upon monetization of the legacy assets after NGN maturity. Disposition options include re-securitization, outright sales, and holding the legacy assets until maturity.

Chairman Debbie Matz: So in other words, credit unions should not expect any refund, if there ever is going to be one, until after 2021? Is that correct?

Larry Fazio: Yes, for the most part.