Monday, September 20, 2010

NCUSIF Premiums for 2011

The NCUA Board stated that at its November meeting it will provide federally-insured credit unions with an estimate of their 2011 premium assessments for the NCUSIF and Corporate Credit Union Stabilization Fund.

Going to pages 1 and 2 of the NCUA's Board Action Memorandum, NCUA staff provides three different scenarios for the NCUSIF equity ratio through the end of 2011 -- optimistic, base, and pessimistic.

NCUA staff estimates that by the end of 2011 the NCUSIF equity ratio will fall below 1.20 percent of insured shares under the base and pessimistic scenarios, which would require the Board to implement a NCUSIF Restoration Plan. The NCUSIF equity ratio is expected to equal 1.17 percent at the end of 2011 under the base scenario and is anticipated to equal 1.12 percent under the pessimistic scenario. Under the optimistic scenario, the NCUSIF equity ratio will equal 1.22 percent.

Assuming that the NCUA Board will maintain the NCUSIF equity ratio at 1.30 percent, then potential NCUSIF premium assessments could range between 8 basis points to 18 basis points. However, the cost and pace of credit union failures and the rate of share (deposit) growth could cause a change in premiums.

The estimated range of premiums does not take into considerations premiums associated with the Corporate CU Stabilization Fund.

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