Federally insured credit unions will receive an equity distribution of more than $160 million this year from the fund that insures savings in the institutions, the credit union federal regulator said Thursday.
In a release, the National Credit Union Administration (NCUA) said, based on the total of insured shares reported in fourth quarter 2018 call reports, the equity ratio of the National Credit Union Share Insurance Fund (NCUSIF) was 1.39% at the end of 2018. The agency noted that level is above the NCUA Board-approved normal operating level (NOL) of 1.38%. To reduce the equity ratio to the approved NOL, a $160.1 million distribution is required, the agency said.
Under the insurance fund equity distribution rules of the agency, a financial institution that filed a quarterly call report as a federally insured credit union for at least one reporting period in calendar year 2018 will be eligible for a pro rata distribution. The agency noted that the eligibility criteria for credit unions to receive an equity distribution is detailed in the final rule approved by the NCUA Board in February 2018.
In 2018, the agency distributed nearly $736 million from the insurance fund, NCUA pointed out, after voting to close the Temporary Corporate Credit Union Stabilization Fund (TCCUSF, a fund sent up in the wake of the housing crisis of 2009-10 to resolve troubled corporate credit unions, i.e., credit unions that serve other credit unions). Earlier in 2017, the board proposed closing the fund, merging its remaining assets into the credit union savings insurance fund (the (NCUSIF), and distributing any funds left over in the insurance fund above the 1.39% NOL.
The distribution announced Thursday is the second from the fund since the TCCUSIF was closed and is the second largest distribution ever made.