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NCUA to Pay $300M to Treasury from Corp Stabilization Fund
Monday, August 3, 2015 6:35 AM

CU Today reports that NCUA plans to make a $300-million payment to the Treasury Department from the Corporate Stabilization Fund. The plan was first mentioned by the agency’s vice chairman, Rick Metsger, during the American Association of Credit Union Leagues’ Summer Meeting, according to sources. NCUA owes $2.5 billion to Treasury related to the Stabilization Fund.

The Stabilization Fund has recorded a positive net position for the last year and according to the most recent report its performance continues to improve.

The NCUA Guaranteed Notes’ (NGN) remaining balances of $15.2 billion are backed by legacy assets with a market value of $16.7 billion, with NCUA saying that as long as the legacy asset values hold relatively steady no additional funding will be needed to pay back NGN investors. Before credit unions can see any refunds on their assessments, the NGN investors must first be repaid, including the U.S. Treasury.

NCUA’s Director of Examination and Insurance, Larry Fazio, said during the board meeting that Treasury will most likely be repaid in 2017. The next maturities take place in 2020 and 2021, with NCUA estimating a surplus that will range from $700 million to $2.5 billion.

With the Stabilization Fund set to expire in June of 2021, there will be no rebates to credit unions ahead of that date, said Fazio.