NCUA provides deeper info on corporate analysis
ALEXANDRIA, Va. (4/13/09)—National Credit Union Administration (NCUA) Chairman Michael Fryzel Friday released a summary of the agency's analysis of the distressed securities held by U.S. Central FCU (U.S. Central) and Western Corporate FCU (WesCorp).
In what was the NCUA's third weekly update on corporate credit unions, the chairman noted that the "incomplete or insufficient nature" of available information on the agency's action addressing corporate credit union stabilization has "led some to question the necessity of the NCUA's actions and level of expected credit losses being projected."
In fact, the Credit Union National Association (CUNA) has repeatedly requested more information regarding NCUA's corporate stabilization actions and filed a formal Freedom of Information Act (FOIA) in March. The agency has 20 days from the March 30 request date to respond, but extensions to that deadline are possible.
Fryzel said the portfolio outlines released Friday and the NCUA's associated summary analysis provides a "concise synopsis of the respective portfolios and enables informed parties to appreciate the scope and severity of the stress on these investments."
"Though virtually all of the securities purchased by these two corporate credit unions were AAA- or AA-rated at the time of purchase, the summary clearly demonstrates how the nature of the securities and the deterioration in the economy have resulted in significant expected credit losses. In the near future NCUA will also be releasing a summary of the PIMCO report," Fryzel said.
The chairman added that the agency also will be addressing the "many questions" surrounding how member credit unions will account for any impairment or write-down of paid-in-capital and membership capital accounts at corporate credit unions. The NCUA, Fryzel promised, will be issuing guidance next week on this subject.
Use the resource link below to access the NCUA weekly summary and for CUNA's comprehensive reource on corporate credit union issues.
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