The National Credit Union Administration (NCUA) announced that it is highly unlikely that credit unions will pay a future assessment to the Temporary Corporate Credit Union Stabilization Fund (TCCUSF).
NCUA cited the significant recoveries from legal settlements and the improvement in the performance of the underlying legacy assets of the NCUA Guaranteed Note program for the diminished prospect of future assessments.
According to the press release, the net remaining Stabilization Fund projected assessment range now runs from negative $1.9 billion to negative $400 million, compared to the negative $200 million to $1.6 billion projection from the second quarter of 2013.
However, NCUA cautions that the legacy asset cash flows have not been realized and could vary significantly from current projections.
In addition, the agency notes that it must still repay $2.9 billion in outstanding Treasury borrowings before any remaining Stabilization Fund distributions can be legally made to credit unions. As a result, any potential repayment to credit unions is not likely to occur prior to expiration of the Stabilization Fund in 2021.
Read the press release.
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