ALEXANDRIA, Va. –Some $736-million in checks will be in the mail next week as NCUA pays dividends for more than 5,700 institutions eligible for a distribution from the National Credit Union Share Insurance Fund.
The agency said statements will be mailed to dividend recipients this week, indicating the amounts they will receive. An institution that filed a quarterly Call Report as a federally insured credit union for at least one reporting period in calendar year 2017 will be eligible for a pro rata distribution, according to NCUA. Funds will be distributed to 5,508 credit unions, which actually represent 5,700 credit unions in all, due to mergers.
As CUToday.info reported earlier, the NCUA Board approved a final ruleat its February 2018 meeting that details eligibility criteria.
“The NCUA’s prudent management of the corporate resolution process provided the ability to close the Stabilization Fund four years early,” NCUA Board Chairman J. Mark McWatters said in a statement. “Through a collaborative, bipartisan process among the board members and a great deal of diligent work by staff, the NCUA has been able to avoid a premium assessment and safely distribute funds to credit unions that can be put to work building local communities, creating new businesses, and improving the lives of members across the country while advancing the objectives of protecting member deposits and maintaining a safe and sound credit union system.”
Added NCUA Board member Rick Metsger, “As we have noted before, this is the largest Share Insurance distribution in this agency’s history, larger, even, than the cumulative amount of all previous cash distributions since the Share Insurance Fund was capitalized. This is a significant benefit to credit unions and will support a lot of provident and productive purposes.”
The NCUA Board gave unanimous approval to the distribution at its February 2018 open meeting. The distribution was possible after the board voted at its September 2017 open meeting to close the Temporary Corporate Credit Union Stabilization Fund and transfer the Stabilization Fund’s assets and obligations to the National Credit Union Share Insurance Fund, as required by law.
More information on the Share Insurance distribution, including the method the NCUA used to determine each institution’s share, can be found online here.
Information about the Stabilization Fund closure, the transfer of assets and obligations to the Share Insurance Fund, and setting the Share Insurance Fund’s normal operating level at 1.39% are all available here.
The payout comes years ahead of when many had forecast any payout might be made. The agency had long said it would not be able to return any of the funds credit unions paid in to prop up corporate credit union losses resulting from the collapse of the housing market until 2021 at the earliest.
However, legal victories against Wall Street banks and other companies have resulted in net recoveries of approximately $3.8 billion.