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Fitch affirms ratings of corporate CUs
MADISON, Wis. (6/23/10)--Fitch Ratings has affirmed the investment-grade, long-term ratings for all retail corporate credit unions at A+, and at AA at U.S. Central FCU. Fitch also affirmed strong short-term ratings of F1 at all the rated corporates. In its recent ratings report, Fitch explained that corporates have been under significant stress during the recent financial market turmoil, and that these new ratings were predicated upon the support the corporates currently receive, and are expected to continue receiving, from the National Credit Union Administration (NCUA). Uninsured deposits in corporates with maturities of up to two years are currently guaranteed under the Temporary Corporate Credit Union Share Guarantee Program (TCCUSGP) through Sept. 30, 2012. This program can be extended, quarterly, until as late as December 2014 under its authorizing statute. Individual ratings of the eight corporate credit unions are at “E,” which reflects that the credit unions have serious credit and/or capital challenges, Fitch said. The corporates are:
* Central Corporate CU (CenCorp), Southfield, Mich.; * Constitution Corporate FCU, Wallingford, Conn.; * Eastern Corporate (EasCorp) FCU, Auburn, Mass.; * First Corporate (FirstCorp) CU, Phoenix; * Mid-Atlantic Corporate FCU, Middletown, Pa.; * Members United Corporate FCU, Eagan, Minn.; * Southeast Corporate FCU, Tallahassee, Fla.; and * Southwest Corporate FCU, Plano, Texas.
Except for Eastern Corporate FCU (EasCorp) and Mid-Atlantic Corporate FCU, the major corporate credit unions operate with total capital ratios below mandatory regulatory requirements. Constitution Corporate FCU is operating under special regulatory assistance related to its depleted capital position. In the report, Fitch said it believes that the corporate credit unions will continue to benefit from government support throughout the planned restructuring of the corporate credit union network and the implementation of new regulations. Under new proposed capital rules, the NCUA plans to strengthen capital requirements for corporate credit unions. For more information, use the link.
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