The NCUA board approved a 13.4 basis point assessment to help raise $1 Billion. This will go towards the payment to the Treasury Department by Dec 30th.
How much more in assessments will be levied against credit unions that had nothing to do with the corporates bad investment decisions? How many credit unions will be forced to merge over the next several years because they can no longer survive? The big will be getting bigger. Some estimates as high as 30% of the remaining 7700 credit unions.
This premium will be billed in mid-July and due by mid-August. This is part of the stabilization fund which has been set aside for losses incurred by the corporates.
Watch for the September announcement from the NCUA about what additional assessments will be needed to shore up the NCUSIF (National Cred Union Stabilization Insurance Fund) . According to board member Michael Fryzel expect an additional total between 15 and 40 basis points. Michael recommends that credit unions budget toward the higher end of that range.
The overriding challenge for credit unions especially the smaller credit unions (those with $50 million or less in assets) will be making money. In light of economic conditions and the members they serve. Losses continue to mount, members are borrowing less. How will they develop business? It might be time to be looking for merger partners.