The audited financial statement for the National Credit Union Share Insurance Fund (NCUSIF) reported a $728.9 million increase in reserves in 2017.
At the end of 2017, Insurance and Guarantee Program Liabilities (reserves) was $925.5 million to cover probable losses compared with $196.6 million for the previous year-end.
The overall increase in the Insurance and Guarantee Program Liabilities balance is due to the increase in the specific reserve of $815.7 million, partially offset by a decrease in the general reserve of $86.8 million.
At the end of 2017, specific reserves were $818.6, while general reserves were $106.9 million.
Specific reserves are identified for those credit unions where failure is probable and where additional information is available to make a reasonable estimate of losses associated with these credit unions. The general reserve reflects overall risk of loss due to potential credit union failures of federally insured credit unions taken as a whole.
In addition, the NCUSIF provided a guaranteed line-of-credit to a third-party lender, such as a corporate credit union. Total line-of-credit guarantees of credit unions as of December 31, 2017 were approximately $410.0 million -- $300 million to Melrose Credit Union and $110 million to LOMTO Federal Credit Union. The two insured credit unions have borrowed $206.0 million from the third-party lender under these lines-of-credit guarantees as of December 31, 2017. The NCUSIF reserved $9.0 million for these guaranteed lines-of-credit at the end of 2017.
However, the audited financial statements caution that actual losses could vary and may be materially different from the estimated losses recognized as of December 31, 2017.
The specific reserves are probably for two conserved credit unions that specialized in taxi medallion loans. Also, the audited financial statement notes that other other credit unions that participated in these loans are experiencing financial stress and warns that "[i]t is possible that some of these credit unions may fail, and these failures may increase the amount of losses absorbed by the Share Insurance Fund in the future. Although this exposure is limited, the NCUA must continue to manage and mitigate any potential risk from these institutions."
Read the audited financial statement.
Subscribe to:
Post Comments (Atom)
So, in addition to allowing taxi CUs to concentrate up to 75% of ASSETS in taxi loans, they let them borrow from aa corporate??
ReplyDelete$200million?
They let them sell hundreds of millions in participations to other cu?
On the heels of the corporates meltdown?
It’s like a bad dream.
Does the NCUA have the gear-shift in Park position? Park as in Stuck on Stupid? Now the NCUA is going to guarantee the Note payable at the corporate credit union too? So, let me understand. The NCUA allows these taxi credit unions to go all in on bad medallion loans. When these taxi credit unions are max'd out on liquidity, they borrow from the corporate credit union & the NCUA guarantees the note. WRONG! The guarantee is the credit unions that are going to get stuck with the taxi medallion assessment to cover NCUA Stupidity. These credit unions are reckless in lending and the NCUA is the co-signer. Easy for them to co-sign when the healthy credit unions end up paying the Note. Beyond a bad dream. It is a nightmare!
ReplyDeleteAgreed.
DeleteIt is corruption within the Agency. Where are our trade groups on alerting Congress to all of this. It has the simplicity of context that should enable and compel Congress to act. Unless everyone at the top of the movement is on the take from we citizens' credit unions.
If so then it is a story that would sell a newspaper. Give it to the media.
The NCUA is a tapeworm on its credit union host. A parasite to the credit union income statement. Eating more and more credit union income, while killing the host as we witness the declining numbers of surviving healthy credit unions. And the trade groups provide not a single shred of patient advocacy. Credit unions continue to suffer the expense of an agency out of control. The NCUA no longer owns the skill set to manage the declining patient load. The only NCUA cure Rx...more assessments, & increasing operating fees. It is criminal "economic" malpractice on a grand scale.
DeleteHow is it that Cuna lost income and no one knows about it and the trade papers don’t report on it?
DeleteThen,CUNA seemingly lies about why they lost money...a broken lease?
Bullx@#’.
Credit unions deserve the regulator and trade association they’re paying for.
It s our own fault.