NCUA audit shows SIF equity ratio at 1.26%; NAFCU expects it to exceed 1.3% soon

by NAFCU Newsroom

The NCUA Tuesday released 2020 audit opinions for its four funds, which all earned “clean” opinions. Of note, the National Credit Union Share Insurance Fund (NCUSIF) equity ratio stood at 1.26 percent as of Dec. 31, 2020.

While the NCUA could assess a NCUSIF premium – the ratio is below the 1.3 percent threshold at which point the NCUA is permitted to do so – NAFCU Chief Economist and Vice President of Research Curt Long said the equity ratio is expected to rise above 1.3 percent soon after the NCUA finalizes call report data and invoices are sent to credit unions to true up capitalization deposits.

NAFCU supports a strong NCUSIF, which provides adequate protection to taxpayers and minimizes the potential for premium charges to credit unions. The association also believes that the SIF should be managed proactively with a goal of identifying and quantifying salient risks, which must be balanced with the understanding that credit union resources are scarce. The association has advised the agency against a premium assessment in 2021 – as credit unions have seen significant share growth and are working to overcome challenges posed amid the pandemic – and advocated instead for additional investment authorities.

 

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