The NCUA held a webinar today to clarify the effects of the May 20th, 2009 amendments to the Federal Credit Union Act. Just a few points of interest:
The impairment to the NCUSIF will not cost natural credit unions any less - we're just putting it on our VISAtm card. The amount will be borrowed from the Treasury by the Stabilization Fund and must be repaid over seven years.
If you assessed the full .99% NCUSIF impairment and premium in the first quarter, congratulations! You did the right thing. In the second quarter, you will book "non-operating income" for the recapitalizaton of the NCUSIF. While the net effect is zero, this is not a reversal of your first quarter entries.
BOTTOM LINE: The NCUA estimates that NCUSIF related expenses for 2009 will be .15% instead of .99% of your insured deposits.
You say you'd rather just take the full "hit" this year rather than deal with it for seven years? You don't have that option, Macho (Wo)Man.
And yes indeedy, expenses related to Stabilization can change. Any bets on whether it will cost us more or less?
You need more information. NCUA Letter No: 09-CU-14 can be found at http://www.ncua.gov/news/express/xfiles/LTCUs09-CU-14CorpStabilizationFundImplementation.pdf
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