ALEXANDRIA, Va. — Total projected assessments from the NCUA's Temporary Corporate Credit Union Stabilization Fund dropped by $2.2 billion during the second half of 2013, the regulator announced Tuesday, adding it was "hopeful" that no future CU assessments would be necessary.
The drop was largely due to a November settlement with JPMorgan Chase and brings the current projected range for total future remaining assets between negative $2 billion and negative $600 million.
At the end of the second quarter of 2013, that range was negative $200 million to $1.6 billion.
The agency said the overall rate of change is consistent with recent trends, as well as continued improvement in the legacy assets underlying the NCUA Guaranteed Note program.
"The more than $1.75 billion in recoveries from NCUA's litigation has certainly brought relief to credit unions, but it's also good to see the general trends continuing," NCUA Board Chairman Debbie Matz said in a statement. "An improving economy and NCUA's continuing efforts to effectively manage losses from the corporate failures at this time make us hopeful that we will not need to make future credit union assessments."
As previously reported, NCUA announced during its November 2013 board meeting that CUs would not face Stabilization Fund assessments in 2014.
The agency said Tuesday that provided both ends of the projected range remain negative, future assessments will likely not be necessary. CUs have already paid more than $4.8 billion in assessments since the Stabilization Fund was created in 2009.
The regulator has $2.9 billion remaining in outstanding borrowings from the Treasury Department related to the corporate CU resolution, and the Stabilization Fund is set to expire in 2021.
The projections just released were part of the agency's online semi-annual update of the costs of the Corporate System Resolution and the performance of the NCUA Guaranteed Notes program.
Because the agency has litigation pending against multiple Wall Street firms in relation to faulty securities purchased by the failed corporates — along with litigation against more than a dozen banks — further reductions in assessments — and even an eventual rebate — may still be possible.
Any potential rebate, however, wouldn't occur before 2021 when the Corporate Stabilization Fund expires.