The National Credit Union Administration (NCUA) Board this morning proposed a plan that would allow credit unions to prepay their annual assessments for the corporate credit union bailout, which they project will amount to $2.94 billion, or 38 basis points, for this year and next.

The prepayments would amount to an interest-free loan, eliminating the need for NCUA to borrow additional funds from the U.S. Treasury as billions of dollars in existing Treasury loans for the bailout come due and billions of dollars in NCUA Guaranteed Notes used to finance the bailout mature. For example, $2 billion of the bailout bonds mature this October. NCUA has issued almost $28 billion of the bonds so far to finance the corporate bailout.

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