House Financial Services Subcommittee Chairman Sean Duffy
(R-WI) urged the National Credit Union Administration (NCUA) to withdraw or amend its proposal to close the Temporary Corporate Credit Union Stabilization Fund (TCCUSF).
The NCUA Board is considering closing the TCCUSF in 2017, prior to its scheduled closing date in June 2021. Once closed, all assets will be distributed to the National Credit Union Share Insurance Fund. This will increase fund’s equity ratio and allow for the return to insured credit unions of any equity above the normal operating level. To ensure the fund has sufficient equity to absorb these risks, the NCUA board proposes to raise the normal operating level to 1.39 percent.
In a letter to the NCUA board, Duffy said credit unions in his district have concerns about the NCUA’s proposal to close the TCCUSF and raise the fund’s normal operating level (NOL) to a “record high level.” He said the NCUA has not made a “justifiable case” as to why a hike in the NCUSIF’s NOL is necessary.
Duffy also raised issue with the idea that federally-insured credit unions would only receive a small percentage in refunds from the $4.8 billion they have paid in assessments since 2010.
“I have concerns that under your current proposal, federally-insured credit unions would only receive a small percentage in returns of the $4.8 billion they have paid to assessments since 2010,” Duffy said. “With NCUA spending over $1 billion in legal fees to help recover funds, the goal of the agency should be to return absolutely every dollar possible to credit unions and their members.”
He encouraged the agency to withdraw or amend this proposal and draft a new one that allows this to happen.