Constitution Corporate is under 'normal supervision'
WALLINGFORD, Conn., and WASHINGTON (11/11/09)--Constitution Corporate FCU told its members this week that it had accumulated a deficit position of $2.4 million as of Sept. 30, which has been guaranteed by the National Credit Union Share Insurance Fund (NCUSIF).
The communication was made "in keeping with our ongoing commitment to be candid and transparent as we attempt to manage difficult issues," said the Wallingford, Conn., corporate in a statement e-mailed to News Now.
The corporate added that "we continue to provide uninterrupted service to members including the payment of all dividends on deposits.
"Constitution's board of directors and management remain in place and are committed to improving profitability. We continue to operate under tight cost controls and work in close contact with the regulators. Management continues to be dedicated to delivering a high level of service to the membership."
The National Credit Union Administration confirmed the report. "NCUA is closely supervising the institution and is very aware of the difficulties it is encountering," said John McKechnie III, NCUA director of public and congressional affairs.
"We are working with the board and management of Constitution in an effort to continue safe operations and uninterrupted service to its members. Constitution is under normal supervision," McKechnie told News Now.
He clarified that "NCUA did not provide cash assistance to Constitution--all liabilities have already been accounted for in the Share Guarantee Program as part of the Stabilization Fund."
On Dec. 31, 2008, the corporate had membership capital shares totaling $66.8 million, and membership capital shares have been depleted as of Sept. 30, according to its unaudited financial statements for the nine months ended Sept. 30.
Other than temporary impairment of investments totaled more than $79.8 million, contributing to a net income loss of $77.4 million, compared with $2.9 million on Sept. 30, 2008.
In its statement, Constitution "also thanked members for their continued support and understanding during this exceptionally challenging time."
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