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News Now

Washington
NCUA issues another advisory about corporate losses
ALEXANDRIA, Va. (5/11/09)--The National Credit Union Administration’s (NCUA) latest advisory reiterates that the agency plans to issue guidance in the form of a letter to credit unions for account holders of paid-in-capital (PIC) and membership capital accounts (MCA) at U.S. Central and WesCorp. The letter will address the impact of the losses that were reflected in March 2009 financial statements on capital holders at these corporates. According to NCUA--based on its loss estimates--WesCorp has exhausted its PIC and MCAs and U.S. Central has exhausted its PIC and 63% of its MCAs, according to WesCorp’s financial statement was posted May 1. U.S. Central’s was set to be posted Friday. The Credit Union National Association (CUNA) and credit union leagues have been very concerned about NCUA's earlier indication that the capital accounts in WesCorp are “extinguished” and that 100% of the PIC and 63% of the member capital shares have been “extinguished” in U.S. Central. Though Friday’s NCUA advisory did not use the term “extinguished,” CUNA President/CEO Dan Mica said CUNA remains concerned and takes the position that the agency should not indicate capital holders at the time of conservatorships may not be able to share in any future recoveries on the corporates’ mortgage-backed securities. Mica and CUNA staff have spoken with Fryzel, NCUA Board Member Gigi Hyland and senior staff at NCUA about the situation. “We have provided to NCUA an economic and legal rationale for allowing the capital holders at the time of the conservatorships to benefit from recoveries on the mortgage-backed securities," he said.


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