Thursday, February 2, 2017

Privately-Insured Credit Unions and Stabilization Fund Rebate Assessment

When the Temporary Corporate Credit Union Stabilization Fund (Stabilization Fund) is closed, credit unions insured by American Share Insurance (ASI) may receive a payment if they have a claim as a depleted member capital holder in a failed corporate credit union recovery. The same would apply for a credit union that switches to a bank charter.

When the Stabilization Fund is closed, the residual assets will be transferred to the National Credit Union Share Insurance Fund (NCUSIF). Priority to the residual assets first goes to depleted member capital holders in failed corporate credit unions. If there is anything leftover after making depleted member capital holder whole, then a rebate will be paid to all National Credit Union-insured credit unions.

According to a National Credit Union Administration (NCUA) spokesperson, "insured status does not apply to recoveries for depleted member capital holders. So a now or future ASI-insured credit union would get a recovery on its depleted member capital if it held such a claim for a failed corporate credit union's estate with a recovery."

However, only credit unions insured by NCUA at the time of the NCUSIF assessment rebate would receive one. No rebates, if any, can come directly from the Stabilization Fund.

That means former NCUSIF-insured credit unions that paid assessments to the Stabilization Fund would not be eligible to receive an assessment rebate.

1 comment:

  1. That's not a problem. There won't be a rebate.
    That's a Hampel white paper urban myth.
    Like his other white papers.



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