NCUA guidance on PIC, MCA out this week

ALEXANDRIA, Va. (5/18/09)—The National Credit Union Administration said it will explain the implications of exhausted and depleted paid-in-capital (PIC) and membership capital accounts (MCA) in guidance that will be released later this week.

NCUA on May 13 addressed revisions to the Temporary Corporate Credit Union Share Guarantee Program in a letter that was issued to corporate credit unions. The NCUA Board could also soon make changes to the Temporary Corporate Credit Union Liquidity Guarantee Program. These changes would aim to enhance liquidity by providing longer term funding options for all corporate credit unions, NCUA said.

In its weekly media release on the corporates, NCUA also updated the financial status of U.S. Central Federal Credit Union and Western Corporate Federal Credit Union.

WesCorp's year-end audited financial statements are due out soon, and its financial statements for the quarter ended March 31, 2009, were posted on May 1, 2009. U.S. Central released its most recent financial statements on May 13, 2009, and is in the process of finalizing its audit procedures. Its year-end financial statements should be released by mid June.

The best estimate of U.S. Central Federal Credit Union's credit losses remains at $2.3 billion. However, U.S. Central's other than temporary impairment charges drop to $1.8 billion when its cash flows from these losses are discounted under Generally Accepted Accounting Principles. This accounting difference means that U.S. Central's MCAs are depleted by 23 percent, not the 63 percent total that was reported on April 30.

Both WesCorp and U.S. Central will publicly discuss their situations this week.

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