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NCUA Board Member Rodney E. Hood Statement Following the Briefing on the Share Insurance Fund’s Quarterly Performance

September 2023
NCUA Board Member Rodney E. Hood Statement Following the Briefing on the Share Insurance Fund’s Quarterly Performance

As Prepared for Delivery on September 21, 2023

Thank you as always, Eugene, for your oversight of our National Credit Union Share Insurance Fund. As I often say, this fund is owned by credit unions, and ultimately credit union member-owners. These quarterly updates are essential to update the public in how we are being responsible fiduciaries to this fund.

So, in that regard, I do have some questions:

  • What are the projected retained earnings at year end?
  • What would the equity ratio be if the 1-percent deposit base of insured shares covered were both computed using the same June 30, 2023, date?
  • For the record, we have asked numerous questions about the investment policy over the last several years. Did the investment policy get updated?
  • Further, when we hit our targeted amount in overnight reserves to prepare for a liquidity event, where do we go from here?
  • How is that asset value calculated for the Corporate Asset Management Estates? Is it the current market value of assets due from AME’s or some other method?
  • When is the income statement impact of the receivable recognized? In other words, when the cash is received or when the assets are entered on the balance sheet in the first place?
  • How much more upside potential is there in this receivable?
  • Shifting gears, how much more have we added in loss reserves this year compared to last?
  • How is the loss reserve calculated?
  • How many in actual dollar losses have we had year to date?
  • Is this more or less than at this point last year?
  • Since the payout on the taxi medallion losses, what has been the actual net cash losses (not the provision expense) for the fund as basis points of insured shares. Is it less than 1 basis point?
  • Related to the cap deposit, I understand there was a sharp decline because of the refunds we did. There was a net we gave back versus a collection, so can you please elaborate?
  • On slide 10, what’s driving this? Would you say the most significant factors are interest rate risk and liquidity?

Thank you. That concludes my questions and comments.

Rodney E. Hood Share Insurance Fund
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