Yesterday, the NCUA Board approved closing the Temporary Corporate Credit Union Stabilization Fund effective Oct. 1, 2017, and setting the Share Insurance Fund’s Normal Operating Level (NOL) at 1.39 percent, effective Sept. 29, 2017. The Board believes a NOL of 1.39 percent is necessary in order to withstand a moderate recession over the next five years.

Board Chairman J. Mark McWatters and board member Rick Metsger both voted Thursday to close the fund. The Board will continue to periodically evaluate the NOL, and any change to the NOL of more than one basis point will require public notice and opportunity for comment.

With the closure of the Stabilization Fund and a NOL of 1.39%, the NCUA estimates a 2018 equity distribution to credit unions of $600 – $800 million. This will be the first in a series of likely distributions between 2018 and 2022 as the legacy assets mature.

The board will publish a public notice in the Federal Register explaining the bases for today’s actions.