NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt on Tuesday told NCUA that a NAFCU report shows no premium assessment may be necessary for the National Credit Union Share Insurance Fund in 2016.
Hunt, writing to NCUA Board Chairman Rick Metsger and Board Member J. Mark McWatters, also urged the agency to set an estimated premium range for 2017 comparable to the range for 2016, which was zero to six basis points.
A report from NAFCU Chief Economist and Director of Research Curt Long and his research team predicts the NCUSIF’s equity ratio will remain above 1.2 percent in 2016. Under the Federal Credit Union Act, the NCUA is required to charge a premium or establish a restoration plan if the fund dips below 1.2 percent. The report forecasts the equity ratio under base-level, optimistic and pessimistic conditions and finds that assessments would not be necessary under any of the scenarios. Currently the NCUSIF operating level is set at 1.3 percent.
“Under base-level and optimistic predictions for 2017, the need for an assessment will be well-avoided,” Hunt wrote. “Only under economic conditions mirroring the last economic recession, an extremely low-probability event at this point, would the share insurance equity ratio fall below the 1.2 percent threshold. Therefore, NAFCU believes the premium range should be maintained at the current range of zero to six basis points for 2017.”
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