Credit union regulator to repay $1B borrowed from Treasury

Credit union regulator to repay $1B borrowed from Treasury
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The federal regulator for credit unions is set to pay off $1 billion it borrowed from the Treasury Department to restore failed small financial institutions.

The National Credit Union Association (NCUA) plans to repay the $1 billion by October 31, the agency announced Tuesday. NCUA will still have a $6 billion borrowing line with Treasury to assist credit unions facing crises.

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“This marks an historic moment for both NCUA and the entire credit union system,” NCUA Board Chairman Rick Metsger said. “The success of the corporate resolution program is a testament to the hard work and perseverance of our entire team, and I extend my deep personal gratitude to all of them for making this possible.”

NCUA paying off its debt means federally insured credit unions won’t be able to receive immediate rebates from Stabilization Fund assessments, the agency said. NCUA will also be unable to reimburse investors in failed credit unions.

The National Association of Federal Credit Unions (NAFCU), the trade group for NCUA-covered credit unions, praised the announcement.

“This milestone is a testament to the safety and soundness of the credit union industry,” said NAFCU President and CEO Dan Berger. “NAFCU will remain vigilant in ensuring that NCUA manages the fund in a way that is most beneficial to credit unions.”