Dear Board of Directors and Chief Executive Officer:
Since 2009, NCUA has provided a projected range for Temporary Corporate Credit Union Stabilization Fund assessments and National Credit Union Share Insurance Fund premiums. The projections are provided to assist credit unions in developing budget estimates for the upcoming year.
Now for the second consecutive year, NCUA is projecting no assessment—and only a possible small premium which would have little or no impact on credit union budgets.
For 2015, NCUA projects a potential Share Insurance Fund premium of 0 to 5 basis points (bps) of insured shares.
The following table provides projected and actual Stabilization Fund assessments and Share Insurance Fund premiums for the past five years. Each year, the actual assessment and premium has fallen within the projected range.
As long as both ends of the range remain negative, there will likely be no need for future assessments. While NCUA estimates that there may be funds remaining after all obligations have been repaid, the Treasury debt must be fully repaid before any remaining funds on hand would be distributed to credit unions. This is not likely to occur prior to expiration of the Stabilization Fund in 2021.
The Share Insurance Fund remained at the 1.30 percent normal operating level as of September 30, 2014. After December 31, NCUA will transfer any equity in excess of the 1.30 percent to the Stabilization Fund, as required by statute.
- Growth in insured shares,
- Yield on Share Insurance Fund investments, and
- Cost and pace of credit union failures.
While NCUA provides this information to assist credit unions in planning for the following year, any actual assessment or premium level would be determined by the Board when declared, and could vary from projections based on a variety of factors.