[Federal Register Volume 75, Number 183 (Wednesday, September 22, 2010)]
[Notices]
[Page 57820]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-23661]


=======================================================================
-----------------------------------------------------------------------

NATIONAL CREDIT UNION ADMINISTRATION


National Credit Union Administration Restoration Plan

AGENCY: National Credit Union Administration (NCUA).

ACTION: Approval of National Credit Union Administration restoration 
plan.

-----------------------------------------------------------------------

    On September 16, 2010, the National Credit Union Administration 
(NCUA) implemented a Restoration Plan for the National Credit Union 
Share Insurance Fund (NCUSIF). The Restoration Plan consists of the 
assessment of a premium of 0.1242 percent of insured shares that will 
increase the equity ratio of the NCUSIF to over 1.20 percent.
    As of August 31, 2010, increased loss provisions resulted in a 
decline in the NCUSIF's equity ratio to 1.176 percent. Because the 
equity ratio of the NCUSIF declined below 1.20 percent, NCUA must 
establish and implement a plan to restore the equity ratio to 1.20 
percent. Absent extraordinary circumstances, the equity ratio must be 
restored to 1.20 percent before the end of an 8-year period beginning 
upon the implementation of the plan. The premium will achieve this 
requirement.
    The economy continues to present a challenge for the financial 
services sector. Housing remains a risk as foreclosures mount. While 
the credit cycle appears to have troughed, the level of delinquent 
loans, charge-offs, and foreclosed real estate in federally insured 
credit unions remains elevated.
    The credit union CAMEL ratings reflect the risk of loss associated 
with individual credit unions.\1\ As of June 30, 2010, there were 366 
federally insured credit unions with total assets of $48.8 billion 
designated as problem institutions for safety and soundness purposes 
(defined as those credit unions having a composite CAMEL rating of 
``4'' or ``5''), compared to 291 problem institutions with total assets 
of $28 billion on June 30, 2009. The trend reflects both an increase in 
the total number of problem credit unions and the size of problem 
credit unions. Additionally, the number and asset size of CAMEL ``3'' 
rated credit unions increased. As of June 30, 2010, there were 1,739 
CAMEL ``3'' rated credit unions with total assets of $149.8 billion 
compared to 1,485 credit unions with total assets of $86 billion on 
June 30, 2009. The reserve for insurance fund losses has increased as a 
direct result of the shift to more adverse CAMEL codes.
---------------------------------------------------------------------------

    \1\ The CAMEL composite rating represents the adequacy of 
Capital, the quality of Assets, the capability of Management, the 
quality and level of Earnings, and the adequacy of Liquidity, and 
ranges from ``1'' (strongest) to ``5'' (weakest).
---------------------------------------------------------------------------

    The premium of 0.1242 percent of insured shares will increase the 
equity of the NCUSIF to 0.30 percent of June 30, 2010 insured shares. 
Based on reasonable assumptions for losses, insured share growth, and 
expenses, the premium will maintain the NCUSIF's equity level well 
above the 1.20 percent minimum level through at least June 30, 2011.
    NCUA will closely monitor the actual equity ratio and six month 
projections for the equity ratio. If needed to maintain the equity 
ratio of the NCUSIF above 1.20 percent, the NCUA Board will consider 
additional premiums after evaluation of the condition of the NCUSIF and 
federally insured credit unions.

    By the National Credit Union Administration Board on September 
16, 2010.
Mary Rupp,
Secretary of the Board.
[FR Doc. 2010-23661 Filed 9-21-10; 8:45 am]
BILLING CODE 7535-01-P