Board Action Bulletin
Revised Program Could Significantly Decrease 2011 Assessments
- Setting assessments in a counter-cyclical manner relative to credit union performance and providing resolution to the corporate crisis during this economic cycle;
- Maintaining a meaningful contingency in Treasury borrowing capacity; and
- Using credit union prepayments to meaningfully reduce near-term Stabilization Fund assessments.
Dedicated Use: NCUA committed to using all received prepayments to decrease 2011 assessments dollar-for-dollar.
- Program Size: NCUA set the program’s size at $500 million.
- Maximum Prepayment: NCUA increased the maximum amount a credit union may voluntarily prepay to 48 basis points of March 31 insured shares; and
- Minimum Contribution: NCUA adopted a more inclusive minimum participation standard of $1,000 or at least 5 basis points of March 31 insured shares—allowing 98 percent of credit unions to participate in the program.
- Participation will be purely voluntary and open to all federally insured credit unions able to meet the minimum participation amount;
- Liquidity will be provided to the Stabilization Fund through an advance of assessments from participating credit unions; and
- If credit unions commit to raising an aggregate amount ($500 million), NCUA will implement the voluntary prepaid assessment program.
- Participating credit unions will not accrue interest on prepaid assessments. NCUA has no independent authority to issue interest-bearing debt.
- NCUA will apply the program amounts as offsets against Stabilization Fund assessments for the years 2013 and thereafter, subject to any remaining balance.
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