NCUA Board Approves $160.1 Million Equity Distribution
This is the second largest distribution in the history of the Share Insurance Fund, according to NCUA officials.
The NCUA board Thursday approved a $160.1 million equity distribution from the Share Insurance Fund to eligible credit unions during the second quarter of 2019.
Agency officials said that the agency’s Normal Operating Level at the end of 2018 was 1.39%, higher than the level of 1.38% the agency had set.
As a result, the board approved the equity distribution.
While applauding the equity distribution, NAFCU President/CEO B. Dan Berger said that the agency’s Normal Operating Level should be set at 1.30%, which would have allowed for an ever larger distribution.
“We commend NCUA for its prudent stewardship of credit union funds and for recognizing that this money could be best put to use serving credit union members around the country,” said CUNA President/CEO Jim Nussle.
“While continuing to advance the objectives of protecting member deposits and maintaining a safe and sound credit union system, we have worked prudently to issue the second largest distribution in the history of the Share Insurance Fund,” NCUA Board Chairman, J. Mark McWatters said. “This action, along with others taken by the NCUA Board, including closing the Stabilization Fund in 2017, kept $1.3 billion at work in credit unions by negating the need for insurance fund premiums and put nearly $900 million back to work in credit unions and their communities with the last two Share Insurance Fund distributions.”
The board last year approved a distribution of $736 million, as a result of merging the corporate stabilization fund with the share insurance fund.
“I am pleased that NCUA’s successful management of the [guaranteed note] program and its successful lawsuits against the firms that sold toxic assets to corporate credit unions have made it possible for us to return funds to credit unions two years in a row,” said board member Rick Metsger.
A financial institution that filed a quarterly Call Report as a federally insured credit union for at least one reporting period in 2018 will be eligible for a pro rata distribution.
NCUA officials said that the board will continue to monitor the health and exposure of the Share Insurance Fund and will evaluate the Normal Operating Level annually.