NCUA's robusterian capital market folks are always primly proud of their "market savvy" and economic forecasting talents - they view themselves as without peer! And, most folks agree with that assessment! [Sorry to use that word; it just slipped out...]
Immersed in their interest rate risk bi-polarity and non-maturity share hysterics, these mavens of "make-it-up" encourage credit unions
|Never at risk!|
Here's a little matrix you can use to build a recurring NCUSIF assessment into your credit union strategic plan...
If national CU asset growth exceeds 2% annually,
then fork over $100 million to NCUA for each percentage point growth above 2%.
National CU Growth Rate $$$ Assessment2% $ 0
3% $ 100 million
4% $ 200 million
5% $ 300 million
8% (actual as of 9/30/16) $ 600 million
(... repeat in 2018 and 2019!)
As discussed in the last post, the NCUA can't pay its bills over the next few years and also maintain a 1.30% NCUSIF equity ratio.
Why? Because the NCUA has 1) a $300 million budget locked in by a union contract over the next few years, 2) the NCUA investment gurus have locked in NCUSIF investment earnings over the next few years at a rate of @2.00% (and claim they can't change their "strategy"!), and 3) the NCUA senior staff evidently can't stand to suggest that the 1.30% equity ratio target be temporarily lowered (and thereby perhaps admit the obvious - the failure of their "strategic foresight"?), until wiser thinking and rising rates can bail them out.
The NCUA Board has several excellent alternatives that would not require hundred million dollar assessments on credit unions.
ACCOUNTABILITY - COMPETENCY - TRANSPARENCY