A proposed rule on capitalization of interest related to the agency’s rules for credit union share insurance is slated for consideration next Thursday by the National Credit Union Administration (NCUA) Board, according to the published meeting agenda.
The proposed rule is being presented under Part 741, Appendix B, Capitalization of interest. Appendix B of the share insurance regs contains an interpretive ruling and policy statement (IRPS) on loan workouts, nonaccrual policy, and regulatory reporting of troubled debt restructured loans.
The open board meeting, set for 10 a.m. ET, will also include board briefings on the National Credit Union Share Insurance Fund (NCUSIF) quarterly report; a 2020 budget update and reprogramming (there was no reprogramming in July, the month NCUA usually discusses budget tweaks a good part into the year), and the “state of credit union diversity” and credit unions’ 2019 diversity self-assessments.
The last briefing on the NCUSIF, provided during the September open board meeting, showed that the fund’s equity ratio had dropped to 1.22% in June – down 13 basis points from Dec. 31, 2019, and 16 bp below what the board defines as the fund’s normal operating level (NOL). The NOL was last adjusted down to 1.38% at the end of 2018.
That report showed that the primary driver of the change was faster growth in insured shares.
Staff noted then that credit unions were due in October to adjust their 1% deposits in the NCUSIF, reflecting their own recent growth, and projected the fund equity ratio will rise to 1.32% by year-end.