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NCUA Report On Insurance Fund And Credit Union Health

Friday, October 22, 2010 - 6:45 AM
The NCUA board reviewed the health of its Share Insurance fund and the health of credit unions in its Oct 21st board meeting. Here are some excerpts from the board meeting results:
Year-to-date net losses for the Share Insurance Fund were reported at $563.7 million. Through September, the fund recorded $643.2 million in insurance loss expense bringing the month end reserve balance to $1.16 billion.

At September 30, 2010, 374 federally insured credit unions, with total assets of $45.3 billion, and total shares of $40.0 billion, were designated as CAMEL codes 4 or 5. Additionally, there were 1,769 CAMEL 3 credit unions with assets of $160.3 billion and shares of $141.6 billion. Together, nearly 23 percent of all assets are in credit unions with a CAMEL code of 3, 4 or 5.

Through September, 25 federally insured credit unions have failed in 2010, including 15 liquidations and 10 assisted mergers.

Note, the liquidation number doesn't include the small Texas credit that was just liquidated.

What does the CAMEL ratings mean? I found this NCUA document which describes the ratings. Here's a brief summary:

Rating 1 & 2 - Credit unions in this group are sound in every respect and generally have components rated 1 and 2.

Rating 3 - Credit unions in this group exhibit some degree of supervisory concern in one or more of the component areas.

Rating 4 - Credit unions in this group generally exhibit unsafe and unsound practices or conditions.

Rating 5 – Credit unions in this group exhibit extremely unsafe and unsound practices and conditions
Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
Rep Points: 125,077
1. Friday, October 22, 2010 - 1:32 PM
Where can one check the CAMEL rating for a CU?
drjoanvdrjoanv1 posts since
Jan 16, 2010
Rep Points: 18
2. Friday, October 22, 2010 - 1:57 PM
Just like the FDIC, the NCUA keeps its CAMEL ratings list secret to prevent a bank run (or in this case a credit union run). They only provide general reports as shown above (like the number of credit unions with CAMEL ratings of 4 and 5).

We provide ratings for all federally insured credit unions using data released by the NCUA. The ratings are based on well-known bank health metrics like the Texas Ratio. These are not the official CAMEL ratings, but they can provide some info on the financial health of the credit union.

To review the health ratings of a credit union, just use the search box in our Bank Health Ratings section (link under the Bank Reviews in the top menu).

Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
Rep Points: 125,077