NCUA Board Agrees to Extend the Corporate Share Guarantee Program

In an action that likely ensures Corporates’ share stability, the NCUA Board agreed to extend the Corporate share guarantee program by providing for optional quarterly extensions through December 2012.

 
 

In an action that likely ensures Corporates' share stability, the NCUA Board agreed to extend the Corporate share guarantee program by providing for optional quarterly extensions through December 2012. The expiration for the Corporates participating in the program had been set to expire at the end of 2010. The NCUA Board also took action to extend the initial time period to September 30, 2011. If the NCUA continues to extend every quarter until the end of this period, the guarantee would expire at the end of 2014.

This action will help the Corporates quell any Credit Union concerns about their safety and soundness. This action was one that was seen as crucial to continuing support of the Corporates by Credit Unions. As many credit union boards focus on maintaining safe and sound portfolios, the Corporates' explicit government guarantee provides insurance against possible investment losses.

NCUA's action demonstrates the ongoing importance of supporting the Corporates and encourages Credit Unions to continue their use of the Corporates. In putting guarantee in place, NCUA is looking to ensure continued liquidity across the corporate network.

NCUA's Office of the Corporate Credit Unions will evaluate the quarterly extension option each quarter. In these uncertain times the guarantee of government support allows credit unions to ladder their investments knowing that the full faith and credit of the US government is backing them.

 

 

 

April 22, 2009


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