Stabilization funds could be returned to credit unions sooner than planned
Credit unions stand to receive a windfall of as much as $800 million next year if the National Credit Union Administration is able to go forward with a plan to merge its corporate credit union stabilization fund into its share insurance fund.
NCUA officials have gone on record repeatedly stating credit unions wouldn’t begin seeing any compensation for the $4.8 billion they were assessed following the failure of five large corporate credit unions until after June 2021. Now, though, with the crisis long since passed and the stabilization fund maintaining a positive balance approaching $1.9 billion, officials said there is little reason for its continued existence.
Better yet, folding it into the $13.2 billion share insurance fund will provide much-needed wherewithal to withstand a potential economic downturn. Under the plan unveiled Thursday at the regular meeting of the NCUA Board, the stabilization fund would be closed at the end of September. Then, after what Chief Financial Officer Rendell Jones called “full-scope” audits of both funds, the path will be clear to disburse between $600 million and $800 million to credit unions sometime in 2018.
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