Do these conservatorships mitigate future losses, or are additional premium assessments possible?
The NCUA Board will continue to evaluate the reserve and funding level of the NCUSIF and determine additional premiums as necessary. The ultimate cost to all insured credit unions will be determined based on the actual performance of these securities which will be driven by the economy. NCUAs analysis, including our assessment of an NCUA-engaged independent review, estimates the total credit losses (by holding to maturity) on all corporate securities at $10.8 billion, with an upper range of $16 billion. Assigning estimated credit losses on these securities at the individual corporate credit union level, and accounting for each corporate credit unions capital results in an NCUSIF reserve of $5.9 billion. NCUA is confident this reserve should be sufficient to resolve the cost of the estimated credit losses on these bonds, but economic uncertainties and declining market conditions could result in greater than estimated losses.
