The NAFCU Journal May - June 2018 - 6

WASHINGTON AND INDUSTRY BRIEFS

The NCUSIF Distribution
by the Numbers
By Curt Long

T

he NCUA later this year will
distribute roughly $736 million
to credit unions as a result of
its closure of the Temporary
Corporate Credit Union Stabilization
Fund (TCCUSF) and that fund's merger
with the National Credit Union Share
Insurance Fund (NCUSIF). While this
is a sizable amount, it is only a small
portion of what is rightfully owed to the
industry - 24 percent to be exact.

As part of its merger proposal, the NCUA
also made clear its intention to raise
the normal operating level (NOL) of
the NCUSIF from 1.3 percent to 1.39
percent. This increase resulted in the
agency retaining a significant amount of
available money in the NCUSIF -
$2.3 billion.
Looking further into the numbers:
Because the amount of the distribution
from the NCUSIF is determined as the
surplus equity above the NOL, the 9
basis point increase in the NOL results
in a reduction to the distribution by 9
basis points of total industry insured
shares, or $978 million. To put it another
way, had the NCUA maintained the NOL
at its previous level, the distribution due
to credit unions this year would have
totaled $1.7 billion.
Furthermore, the amount of this
announced distribution represents just
a fraction of the equity in the TCCUSF
at the time of the merger. The NCUA
reported a net position of $2.6 billion for
the fund immediately prior to the Oct. 1,
2017, merger. Based on agency estimates,
6

Allocation of Corporate
Stabilization Equity at Year-End

Distributed to FICUs
24%
44%

Retained in NCUSIF
due to increase in NOL
Retained in NCUSIF in
order to return equity
ratio to 1.3%

32%

the equity provided to the NCUSIF
through the merger of the TCCUSF had
grown to roughly $3 billion by year end.
The chart shows the allocation of the $3
billion of equity attributable to corporate
stabilization at year end. The largest area
in blue represents the equity retained
in the NCUSIF in order to increase
the equity ratio from where it would
have ended the year had there been no
merger (1.18 percent) up to the historical
normal operating level of 1.3 percent. In
dollar terms, this amount totaled $1.3
billion. The increase in the NOL resulted
in an additional 32 percent of TCCUSF
funds being retained in the NCUSIF.
While the return of $736 million to
credit unions is a cause for celebration,

imagine the impact to credit unions'
services and operations if they were
to be receiving $1.7 billion? NAFCU
supports a strong NCUSIF, but we
believe the NCUA has the necessary
tools to address risks to the fund
without charging credit unions nearly
$1 billion.
NAFCU will continue to push the NCUA
to distribute as much money back to
credit unions as possible, as well as
return the NOL back to 1.3 percent.
For more in-depth analysis, visit www.
nafcu.org/data-tools/share-insurancefund-analysis-forecast.
Curt Long is NAFCU's chief economist and
vice president of research.
THE NAFCU JOURNAL  MAY-JUNE 2018


https://www.nafcu.org/tccusf https://www.nafcu.org/tccusf https://www.nafcu.org/tccusf https://www.nafcu.org/ncua https://www.nafcu.org/ncua https://www.nafcu.org/ncua http://www.nafcu.org/data-tools/share-insurance-fund-analysis-forecast http://www.nafcu.org/data-tools/share-insurance-fund-analysis-forecast http://www.nafcu.org/data-tools/share-insurance-fund-analysis-forecast

Table of Contents for the Digital Edition of The NAFCU Journal May - June 2018

Conferences
From the Chair
Washington and Industry Briefs
Trump, Credit Union CEOs Discuss Issues at White House
Growth Strategies
In Cybersecurity We Trust?
The New Landscape of Mobile Banking
2018 Annual Conference Exhibitor Directory
Executive Spotlight
Management Insight
Compliance Central
Inside NAFCU Services
The NAFCU Journal May - June 2018 - Cover1
The NAFCU Journal May - June 2018 - Cover2
The NAFCU Journal May - June 2018 - 1
The NAFCU Journal May - June 2018 - 2
The NAFCU Journal May - June 2018 - Conferences
The NAFCU Journal May - June 2018 - From the Chair
The NAFCU Journal May - June 2018 - 5
The NAFCU Journal May - June 2018 - Washington and Industry Briefs
The NAFCU Journal May - June 2018 - 7
The NAFCU Journal May - June 2018 - 8
The NAFCU Journal May - June 2018 - 9
The NAFCU Journal May - June 2018 - Trump, Credit Union CEOs Discuss Issues at White House
The NAFCU Journal May - June 2018 - 11
The NAFCU Journal May - June 2018 - 12
The NAFCU Journal May - June 2018 - 13
The NAFCU Journal May - June 2018 - 14
The NAFCU Journal May - June 2018 - 15
The NAFCU Journal May - June 2018 - Growth Strategies
The NAFCU Journal May - June 2018 - 17
The NAFCU Journal May - June 2018 - In Cybersecurity We Trust?
The NAFCU Journal May - June 2018 - 19
The NAFCU Journal May - June 2018 - 20
The NAFCU Journal May - June 2018 - 21
The NAFCU Journal May - June 2018 - 22
The NAFCU Journal May - June 2018 - 23
The NAFCU Journal May - June 2018 - The New Landscape of Mobile Banking
The NAFCU Journal May - June 2018 - 25
The NAFCU Journal May - June 2018 - 26
The NAFCU Journal May - June 2018 - 27
The NAFCU Journal May - June 2018 - 28
The NAFCU Journal May - June 2018 - 29
The NAFCU Journal May - June 2018 - 30
The NAFCU Journal May - June 2018 - 2018 Annual Conference Exhibitor Directory
The NAFCU Journal May - June 2018 - 32
The NAFCU Journal May - June 2018 - 33
The NAFCU Journal May - June 2018 - 34
The NAFCU Journal May - June 2018 - 35
The NAFCU Journal May - June 2018 - 36
The NAFCU Journal May - June 2018 - 37
The NAFCU Journal May - June 2018 - 38
The NAFCU Journal May - June 2018 - 39
The NAFCU Journal May - June 2018 - 40
The NAFCU Journal May - June 2018 - 41
The NAFCU Journal May - June 2018 - 42
The NAFCU Journal May - June 2018 - 43
The NAFCU Journal May - June 2018 - 44
The NAFCU Journal May - June 2018 - 45
The NAFCU Journal May - June 2018 - 46
The NAFCU Journal May - June 2018 - 47
The NAFCU Journal May - June 2018 - Executive Spotlight
The NAFCU Journal May - June 2018 - 49
The NAFCU Journal May - June 2018 - Management Insight
The NAFCU Journal May - June 2018 - 51
The NAFCU Journal May - June 2018 - Compliance Central
The NAFCU Journal May - June 2018 - 53
The NAFCU Journal May - June 2018 - Inside NAFCU Services
The NAFCU Journal May - June 2018 - 55
The NAFCU Journal May - June 2018 - 56
The NAFCU Journal May - June 2018 - Cover3
The NAFCU Journal May - June 2018 - Cover4
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