Praising the distribution of nearly $736 million to credit unions this year, a member of the board of the federal credit union regulator compared credit unions’ experience to that of federally insured banks, which he said would be paying insurance premiums.
Rick Metsger, member of the National Credit Union Administration (NCUA) Board, told a conference hosted by the Credit Union National Association (CUNA) that, while credit unions are receiving the millions in distribution from the excess in the National Credit Union Share Insurance Fund (NCUSIF), “banks will be paying premiums to build up their deposit insurance fund, and, to the best of my knowledge, banks have never received a distribution from their fund.”
The credit union regulator was referring to the Federal Deposit Insurance Corp.’s (FDIC) Deposit Insurance Fund (DIF), which insures deposits in commercial banks and savings associations.
Metsger said the decision by the NCUA Board to make the decision to distribute the funds “was a wise one.”
“Without such action, the Share Insurance Fund would have fallen to 1.18% at year’s end, below the statutory minimum to be considered adequately capitalized as required by law,” Metsger said. “Had we followed that path, credit unions would be facing premium assessments of $1.3 billion just to return the fund’s equity ratio back to the original 1.30% normal operating level. Instead, the checks will be flowing the other way.”
In other remarks, Metsger noted that the credit union conference (among the largest held annually by the industry) would likely be his last appearance as an NCUA Board member. His term on the board expired in August 2017; he has remained on the board since then. President Donald Trump has not yet nominated a successor for his seat on the board.
“And since this will likely be my last GAC, I want to thank President Obama for asking me to come out East and join the NCUA Board and later to designate me as agency Chairman. I also want to thank President Trump for allowing me to continue working with (NCUA Board) Chairman Mark McWatters to make the credit union system stronger for working Americans.”