NJCUL President/CEO David Frankil Expresses Concern with NCUA’s Proposed TCCUSF Refund Plan in Comment Letter

HIGHTSTOWN, N.J. – In a comment letter sent to the agency Tuesday, NJCUL President/CEO David Frankil expressed concern with portions of the NCUA’s proposed plan to close the Temporary Corporate Credit Union Stabilization Fund (TCCUSF). The most significant issue is the proposed increase in the equity ratio of the National Credit Union Share Insurance Fund (NCUSIF) Normal Operating Level (NOL) from 1.30 percent of insured shares to 1.39 percent of insured shares, with planned Equity Distributions. Though the League agrees that the NCUA has the authority to close the TCCUSF and supports this action, there is concern over NCUA’s plan to markedly increase the NOL, which will divert millions of dollars that rightfully should be returned to credit unions and their members.

“Increasing the NOL from 1.30 percent to 1.39 percent would reduce the rebate from approximately $1.5 billion-$1.7 billion to $600 - $800 million,” Frankil stated. “A partial rebate is not acceptable; absent the presence of a systemic crisis on the scale faced in 2009, credit unions have fully paid for the corporate financial crisis and are entitled to a full rebate.”

In the comment letter, Frankil urges the NCUA to close the Fund, merge it with NCUSIF, maintain the NOL at 1.30 percent, and make initial distributions to credit unions as early as 2018.

Click here to view the League’s comment letter in its entirety.

NJCUL has been providing members with information and resources regarding the NCUA’s Stabilization Fund Closure Plan through communications and on a designated web page for this issue, which has links to the proposed rule, CUNA’s summary, and comment letter templates.

Contact Nicola Foggie at nfoggie@njcul.org or 1-800-792-8861, ext. 112 for more information.