Credit unions got good news from the NCUA on Nov. 1 - the range of corporate assessments narrowed on the upper end. The NCUA announced that the performance of legacy assets had performed well from December, 2011 to June, 2012. This means that the range associated with the Temporary Corporate Credit Union Stabilization Fund (Stabilization Fund) declined. The announcement came as part of a semi-annual update of the agency’s online resources that increase public awareness of the costs of the Corporate System Resolution and the performance of the NCUA Guaranteed Notes (NGN) Program.
“NCUA is committed to periodically updating the estimates about the losses associated with the Corporate System Resolution, which will vary over time, and the total anticipated assessments that credit unions will pay during the life of the Stabilization Fund,” NCUA Board Chairman Debbie Matz said. “The latest forecasts indicate that the top end of the range of total Stabilization Fund assessments has declined by $400 million during the last six months.”
Credit unions have already paid $4.1 billion in Stabilization Fund assessments toward the losses in the corporate credit union system. Total future assessments are projected to range between $1.9 billion and $4.8 billion over the remaining life of the Stabilization Fund. The Stabilization Fund expires in 2021.
Also connected to the fund, the NCUA has filed eight lawsuits against seven Wall Street securities firms seeking recoveries for faulty disclosures in the mortgage-backed securities purchased by the failed corporate credit unions. By lowering the cumulative losses on the legacy assets, these recoveries help reduce the assessments that credit unions will need to pay over time through the Stabilization Fund.