As Prepared for Delivery on September 17, 2020
Thank you for your presentation. As we all work through the unfolding events of these current economic times, the quarterly updates on the National Credit Union Share Insurance Fund is an important source of information for the Board and the public. These presentations provide transparency into the condition of the fund and provide insight into the health of the credit union industry.
There has been growing anticipation around the performance of the Share Insurance Fund following the economic impact of the COVID-19 pandemic. Based on today’s presentation, we remain above the minimum equity ratio of the Share Insurance Fund, but vigilance is needed to manage and monitor this situation.
As the result of extraordinary growth in insured shares during the first and second quarters of 2020, we see from today’s presentation that the equity ratio has seen a significant drop from where it was as of December 31, 2019. The equity ratio has declined from 1.35 percent, down to 1.22 percent.
I understand the FDIC faces a similar situation, and with the Deposit Insurance Fund falling below its minimum reserve ratio of 1.35 percent. This caused the FDIC to create a restoration plan for the Deposit Insurance Fund.