NCUSIF, CURE, Nonmember/Public Shares Focus of NCUA May Board Meeting
The National Credit Union Administration Board met on May 23rd and issued a proposal for comments on federal credit union nonmember and public unit shares. The Board also received a quarterly briefing on the National Credit Union Share Insurance Fund (“NCUSIF”) and on the efforts of the agency’s Office of Credit Union Resources and Expansion (CURE) to facilitate credit union growth.
Proposal Would Improve the Regulation of FCU Nonmember and Public Unit Deposits
Currently, federal credit unions may receive up to 20 percent of total shares, or $3 million, whichever is greater, from certain nonmembers, such as nonmember credit unions and public unit funds. A federal credit union can request a waiver from the limit from its NCUA regional director.
The proposed rule approved for comments would raise the nonmember share limit to 50 percent, eliminate waivers and the request process, and base limitations on paid-in and unimpaired capital and surplus, rather than on shares. A credit union would have to develop a specific plan for its nonmember shares, if combined with its borrowings, they exceed 70 percent of paid-in and unimpaired capital and surplus.
Comments are due to the agency within 60 days of publication. A copy of the proposal may be found at https://www.ncua.gov/files/agenda-items/AG20190523Item3b.pdf.
CURE Updates the Board on Added Resources
NCUA’s CURE Office has more resources for credit unions on tap to identify low-income areas and to help groups organize a credit union.
Among the resources highlighted:
- An online low-income designation area workbook that organizing groups and existing credit unions can use to identify low-income areas for possible inclusion;
- Chartering modernization effort in development to automate and streamline chartering;
- A planned new web portal to assist credit union organizers, including developed business models that organizing groups can use; and
- NCUA training available for all credit unions through its Learning Management Service.
The agency noted that low-income designated credit unions interested in 2019 Community Development Revolving Loan Fund grants can submit applications from June 2 through July 20 and about $2 million in grants will be distributed, subject to availability.
NCUSIF Reflects Credit Union Strength
Agency staff reported the NCUSIF’s total assets increased to $16.2 billion at the end of the quarter from $15.8 billion at the end of the fourth quarter of 2018.
NCUA said the $160.1 million share distribution in March was the second largest NCUSIF distribution in the history of the fund; in the past 11 months, NCUSIF equity distributions have totaled about $900 million.
NCUA also reported:
• The number of CAMEL codes 4 and 5 credit unions increased to 202 from 193 at the end of the fourth quarter of 201 but assets for these credit unions remained from the fourth quarter of 2018 to the first quarter of 2019 at $11.8 billion.
• The number of CAMEL code 3 credit unions decreased to 905 from 940 and their assets decreased to $50.5 billion from $52.7 billion.
• NCUSIF reserves for possible losses increased by $36.1 million during the quarter.
The NCUA’s news release about its May Board Meeting may be found at: https://www.ncua.gov/newsroom/press-release/2019/cure-expanding-resources-credit-unions
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