CUNA on Aug. 31 endorsed the NCUA's plan to close the Temporary Corporate Credit Union Stabilization Fund, but opposed the agency's plan to boost the fund's normal operating level to 1.39%.
"CUNA urges (the) NCUA to close the Stabilization Fund in 2017 by merging it into the Share Insurance Fund so that in early 2018, credit unions can receive a return of excess equity above the NOL," Ryan Donovan, CUNA's chief advocacy officer, wrote in a letter commenting on the agency's plan.
The NCUA board in July agreed to solicit comment on a plan to close the stabilization fund in September; that could result in a Share Insurance Fund distribution to federally-insured credit unions of between $600 and $800 million.
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The stabilization fund had been scheduled to close in 2021.
Under federal law, the stabilization fund has been used to provide the agency with the ability to mitigate costs from stabilizing the corporate credit union system.
At the same time, the NCUA board agreed to seek comment on a plan to increase the normal operating level of the Share Insurance Fund from 1.30% to 1.39%.
In its comment letter, NAFCU said it opposes the closing of the stabilization fund right now. The trade group said additional research is needed before the merging of the stabilization and share insurance funds takes place.
But CUNA said there is no compelling reason not to merge the funds.
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