TCCUSF to Close in 2017, NCUSIF NOL Increased to 1.39 Percent

The National Credit Union Administration (NCUA) Board voted to close the Temporary Corporate Credit Union Stabilization Fund (TCCUSF) in 2017.

The funds, property, and other assets and liabilities of the TCCUSF will be transferred to the National Credit Union Share Insurance Fund (NCUSIF) on October 1, 2017.

In addition, the NCUA Board raised the normal operating level (NOL) for NCUSIF from 1.30 percent to 1.39 of insured shares, despite the objection of many credit union commenters.

The NCUA Board spent part of the meeting challenging the false narrative that an NCUSIF equity ratio of 1.30 percent would withstood the financial crisis. The Board presentation noted that even without the corporate credit union losses, the NCUSIF equity ratio in 2009 and 2010 would have fallen below 1.20 percent, the threshold requiring premium assessments. Without the premium assessment, the NCUSIF equity ratio would have dropped to 1.07 percent.

The Board also adopted a policy for setting the normal operating level.

Any change to the normal operating level of more than 1 basis point shall be made only after a public announcement of the proposed adjustment and opportunity for comment. In soliciting comment, the NCUA will issue a public report, including data supporting the proposal.

When setting the normal operating level, the Board will seek to satisfy the following objectives:

• Retain public confidence in federal share insurance;
• Prevent impairment of the one percent contributed capital deposit; and
• Ensure the Insurance Fund can withstand a moderate recession without the equity ratio declining below 1.20 percent over a five-year period.

Read the Final Notice.