The NCUA this week reaffirmed its position that it cannot now provide credit unions with rebates from the Temporary Corporate Credit Union Stabilization Fund.
The board received a staff briefing on the fund at its December meeting.
“We can’t rebate funds at this time,” Larry Fazio, the agency’s director of examination and insurance told the board, adding that staff estimates could be updated in the future depending on market performance and other factors.
Credit union trade groups had called on the board to approve a rebate to credit unions as soon as possible.
Under federal law, the fund is to be used to provide the agency with the ability to mitigate costs from stabilizing the corporate credit union system.
Fazio and other staff members told the board Wednesday that some rebates in the future might be possible.
They said the agency expects to have to sell $1 billion in legacy assets associated with the system in order to meet its obligations. That sale will allow the agency to meet obligations in 2020 and 2021 without having to borrow from the Treasury or require an assessment from credit unions.
Credit unions have paid approximately $4.8 billion in Stabilization Fund assessments. Additional funds have been obtained through legal settlements.
Also during the meeting, the NCUA approved final rules eliminating the requirement that federal credit unions plan and reach full occupancy in their acquired premises. The rule changes the definition of “partial occupancy” to mean use by a federal credit union and a CUSO in which the credit union has a controlling interest.
NCUA Board Chairman Rick Metsger said the final rule is an acknowledgement that in this age, “brick and mortar is not so important.”
The board also approved interim final rules updating its Freedom of Information Act regulations.
It also approved a request from the Texas Credit Union Department to update its member business lending rule to conform to changes made in the NCUA rule. That approval is needed for any state that wishes to have its own member business rule.
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