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NCUA Adjusts Operating Level, Allows Potential Rebate to CUs

Dec 18, 2018
The National Credit Union Administration's governing board approved a decrease to its normal operating level that makes a rebate to credit unions more likely. It also put its stamp of approval on a report that is likely to hasten renewed conflict with banks.

The National Credit Union Administration’s governing board approved a decrease to its normal operating level that makes a rebate to credit unions more likely. It also put its stamp of approval on a report that is likely to hasten renewed conflict with banks.

Meeting Thursday at the agency’s headquarters in Alexandria, Va., the board voted to reduce the normal operating level, which sets the equity level of NCUA’s share insurance fund, to 1.38 percent—down 1 basis point from the current level of 1.39 percent.

The operating level adjustment was a last-minute change and was added after the agenda was published earlier this month. Since any potential rebate is based on the year-end equity ratio, officials hustled to get the issue in front of the two-person board after determining recently that the levels required for the share insurance fund had changed.

A rebate would occur if the equity in the fund is found to be above the recently lowered 1.38 percent threshold. The agency will make that calculation sometime in February. If a rebate is warranted, the funds would be delivered to individual credit unions prior to the end of the second quarter, according to Larry Fazio, director of NCUA’s office of examination and insurance.

Source: Credit Union Journal