Read more at the Washington CU Daily
The National Credit Union Administration’s Share Insurance Fund remains strong even though the agency’s equity ratio is below the normal rate set by the NCUA board, Eugene Schied, the agency’s CFO said during the NCUA board meeting on Thursday.
Scheid, who briefed the agency board on the state of the fund, said the equity ratio stood at 1.26% at the end of 2021. The board has set the agency’s Normal Operating Level at 1.33%.
Board members did not seem concerned that the equity ratio remained below the normal level.
“After another challenging year, the Share Insurance Fund continues to perform well and remains on a solid footing,” NCUA board Chairman Todd Harper said. “Overall, the credit union system has also, thus far, withstood the pandemic’s evolving economic fallout.” He warned, however, that the credit union system most likely has not yet experienced the full impact of the pandemic’s financial and economic disruptions.
Board Vice Chairman Kyle Hauptman agreed that the report was positive, saying, “There is a lot of good news in this report. The credit union movement continues to perform well despite the challenges of the pandemic.”
Board member Rodney Hood noted that despite the pandemic, there were no significant losses to the Share Insurance Fund last year.
The board also approved a proposed rule that would change the asset threshold used to determine when a credit union is subject to enhanced supervision of the agency’s Office of National Examinations and Supervision. For qualifying credit unions, the asset threshold would change from $10 billion to $15 billion.
Harper said the change will assist the agency in better managing its resources. “Without this adjustment, the number of covered credit unions supervised by ONES would nearly double in 2023,” he said. “That would require a substantial reallocation of personnel within the agency.”
Such a reallocation could have an impact on the agency’s budget, Hauptman said.
The board also approved an interim final rule to extend pandemic-related Prompt Corrective Action requirements until March 2023.