NCUA Share Insurance Distribution Information
The National Credit Union Administration (NCUA) board approved a $735.7 million Share Insurance Fund Equity Distribution to all eligible financial institutions. The board also modified NCUA Rules & Regulations Part 741, the existing Share Insurance Fund equity distribution rule. The rule modification provides a temporary provision which determines how funds relating to the temporary Corporate System Resolution Program will be distributed among federally insured financial institutions. To be eligible for the distribution, a credit union must have filed a quarterly Call Report for at least one reporting period in 2017. The rule became effective on March 25, 2018.
The initial equity amount is estimated to be 0.00085897013052 of the average insured shares of each institution. A credit union can estimate its pro rata share of the Share Insurance Fund equity distribution by calculating its average amount of insured shares as reported on quarterly Call Reports from March 31, 2009, to December 31, 2017, and multiplying the result by 0.00085897013052. The factor is subject to change and the final distribution will be calculated by the NCUA and paid in the third period of 2018.
We encourage credit unions to refer to Frequently Asked Questions Regarding Accounting for the NCUA's 2017 Share Insurance Fund Equity Distribution FAQ published by NCUA for accounting treatment. We also recommend credit unions contact their CPA firm for advice on how to account for this transaction.