More than 5,500 credit unions are beginning to receive statements this week showing their share of a $160 million payout by their federal regulator of excess funds from the federal insurance fund for the cooperative financial institutions.
The National Credit Union Administration (NCUA) said Tuesday that the statements are being sent to federally insured credit ujnions that filed a quarterly call report as a federally insured credit union for at least one reporting period in calendar year 2018. The funds are being distributed on a pro rata basis.
In a statement, the agency noted that the NCUA Board in March approved the $160.1 million payout (officially known as a “dividend”). The board made the decision after determining that the equity ratio of the National Credit Union Share Insurance Fund (NCUSIF) stood at 1.39% of total reserves to total credit union savings insured. The “normal operating level” (NOL) of the fund is 1.38% (as set by the board); the $160.1 million represents those funds that are in excess of the fund’s NOL, which the agency is required to return to credit unions under federal law and regulations.
This latest distribution is the second that the agency has made to credit unions over the last two years. In 2018, the agency distributed nearly $736 million from the insurance fund after the board voted to close the Temporary Corporate Credit Union Stabilization Fund (TCCUSF, a fund set up in the wake of the housing crisis of 2009-10 to resolve troubled corporate credit unions, i.e., credit unions that serve other credit unions). Earlier in 2017, the board proposed closing the fund, merging its remaining assets into the credit union savings insurance fund (the NCUSIF), and distributing any funds left over in the insurance fund above the 1.39% NOL.