An audit of the NCUA's four permanent funds received a clean audit opinion for 2015, according to a report released by the Office of the Inspector General Tuesday.
The audited financial reports included the National Credit Union Share Insurance Fund, the agency's Operating Fund, the Central Liquidity Facility and the Community Development Revolving Loan Fund, and was prepared by independent auditor KPMG LLP.
The OIG report said there are “three emerging risks” that will provide unique challenges to the agency, and could potentially affect the safety and soundness of the credit union system and the Share Insurance Fund if not adequately managed in 2016. They were aging membership, disparities in performance between large and small credit unions, and vendor authority. These emerging risks were in addition to continuing concerns from the 2015 report, which included both interest rate risks, as well as cybersecurity concerns.
“Year after year, the results of the independent audit confirm [the] NCUA's careful management of our permanent funds, and each year the agency makes complete financial reports available as part of our ongoing commitment to transparency,” NCUA Board Chairman Debbie Matz said. “Credit goes to all the staff members who work so hard to ensure the stability of the permanent funds.”
The Share Insurance Fund held more than $12.3 billion in total assets as of Dec. 31, 2015. The Share Insurance Fund protects member deposits up to $250,000 for more than 102 million consumers at more than 6,000 federally insured credit unions.
The clean audit was applauded by NAFCU Chief Economist and Director of Research Curt Long.
“The financial condition of the Share Insurance Fund reflects the fact that the industry is healthy and growing, with fewer losses for failed credit unions,” he said in a statement.
Long further noted that the impact of stronger share growth in a low-interest rate environment may put pressure on the equity ratio in coming years.
“NAFCU will continue to monitor the health of the fund and work with the agency to ensure that credit unions and their members are protected from any unnecessary assessments,” he said.
KPMG said it expects to issue an opinion on the 2015 financial statements for the Temporary Corporate Credit Union Stabilization Fund in March. That fund received a clean audit in 2014.
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