Board Action Bulletin
Briefed on Performance of Share Insurance Fund in Q3 2024
ALEXANDRIA, Va. (Nov. 21, 2024) – The National Credit Union Administration Board held its eighth open meeting of 2024 and approved the Central Liquidity Facility’s budget for 2025–2026. The Board also received a briefing on the performance of the National Credit Union Share Insurance Fund for the third quarter of 2024.
Central Liquidity Facility Budget Approved
The Board unanimously approved the 2025–2026 Central Liquidity Facility’s budget of $2,307,863 for 2025 and $2,448,263 for 2026.
“The CLF is a beneficial tool, and it should be part of any credit union’s liquidity risk management plans for a variety of contingencies, not merely during times of crises,” NCUA Chairman Todd M. Harper said. “Although it’s not required by our rules, having small and mid-sized credit unions with less than $250 million in assets join the CLF provides them access to this vital federal liquidity backstop during times of stress. Once markets freeze up, it’s difficult for institutions to quickly access emergency liquidity from market sources. Joining the CLF in advance of a liquidity event can better assist credit unions of all sizes to navigate unanticipated market situations.”
The CLF currently has 431 regular members and 11 corporate credit union correspondents. The CLF’s capacity stands at $21.7 billion compared to $20.1 billion approximately one year ago.
“While the CLF is growing in capacity, the congressional restoration of the expired CLF statutory enhancements — like the agent-membership provisions for corporate credit unions to serve a subset of their members — would serve the whole system well,” said Chairman Harper. “That’s why the NCUA Board continues to call upon Congress to reinstate these provisions. In fact, we’re unanimous in our views here.”
The 2025–2026 CLF budget justification is available on the NCUA’s website. The document includes information on the spending categories, sources and uses of funds, and planned activities.
Number of CAMELS Code 4 and 5 Credit Unions Increase in Third Quarter
The Chief Financial Officer briefed the NCUA Board on the performance of the Share Insurance Fund for the quarter ending on September 30, 2024. The Share Insurance Fund reported a net income of $72.2 million for the third quarter of 2024, $22.6 billion in assets, and $145.8 million in total income for the third quarter of 2024.
“Overall, the Share Insurance Fund’s performance in the third quarter of 2024 was strong. Yet, we continue to find ourselves in a good news, bad news scenario,” Chairman Harper said. “Since December 2022 until today, the fund has experienced a nearly $1 billion dollar increase. This change resulted in the fund’s total assets reaching nearly $22.6 billion. Adding to the financial strength of the fund, quarterly investment income has risen a healthy $12 million since the first quarter of 2024.”
The Chairman added, “We continue to see signs of financial strain on credit union balance sheets and consumer financial stress. And, we’re seeing this play out in the number of credit unions and the percentage of assets held by composite CAMELS code 3, 4, and 5 credit unions. Of greatest concern for me has been the large number of troubled CAMELS code 4 and 5 credit unions, especially the nine troubled complex credit unions with more than $500 million in assets. These conditions are another reason why our supervision of these and all federally insured credit unions must remain risk focused. They also highlight the need for the NCUA’s examiners to be ready to act expeditiously when identifying problems.”
Additionally, for the third quarter of 2024:
- The number of composite CAMELS code 3 credit unions decreased in second quarter from 743 to 730 at the end of the third quarter. Assets for these credit unions decreased from the second quarter to $189.8 billion from $191.1 billion.
- The number of composite CAMELS codes 4 and 5 credit unions increased in second quarter from 136 to 138 at the end of the third quarter. Assets for these credit unions decreased from $19.6 billion to $19.1 billion.
As of the end of the third quarter of 2024, two federally insured credit union failures cost the Share Insurance Fund approximately $2 million in losses.
The third quarter figures are preliminary and unaudited. Additional information on the performance of the Share Insurance Fund is available on the NCUA’s website.
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