NCUA Board Meeting: No Premium Assessment Needed at Present; Final Rules to Get a Vote Later this Year

In good news for credit unions, the National Credit Union Administration Board today announced that no National Credit Union Share Insurance Fund (NCUSIF) premium is needed at present to bolster the fund.

The NCUSIF report was largely encouraging in that the equity position beat the forecast -- albeit by a slim margin (1.23% vs. the projected 1.22%). The better news is that the year-end forecast for the fund's equity rate is 1.28% after the recapitalization "true-up," based on increased insured shares. The capitalization "true-up" is not booked by credit unions as an expense, whereas the premium would be. The rosy forecast for the equity rate makes it increasingly unlikely that a premium assessment will be needed this year.

Chairman Todd Harper, who has advocated for a more robust fund, expectedly issued his cautionary warning.

Board Member Rodney Hood countered his argument by advocating for a return to a normal operating level of 1.30% versus the 1.38% in place today.

In other business:

• Budget: The NCUA reallocated savings from lower travel costs to fund positions in cybersecurity.
• Actions on Final Rules: Vice Chairman Kyle Hauptman and Hood successfully passed an agenda item slating final actions this year on the proposed CUSO rule, field-of-membership rule related to shared facilities, and the final rule regarding mortgage servicing rights.
• Subordinate Debt: The Board will amend the current rules to allow the Treasury to continue to work through the backlog of applications for the Emergency Capital Investment Program. Credit unions that receive the funds in 2022 will not need to provide additional disclosures as required under the Subordinate Debt Rule, effective in January 2022.

NCUA's website features an archived version of today's livestreamed Board meeting.

In other NCUA-related news, reports out of Washington note that NCUA Chairman Todd Harper may get a confirmation hearing next week. The White House announced last month that President Joe Biden would nominate NCUA Chairman Todd Harper to a full term on the NCUA's board.

Harper joined the NCUA board in 2019, becoming chair once Biden took office in January. Harper’s term expired in April of this year.

CUNA's summary of the NCUA Board Meeting