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NCUA releases corporates distressed securities info
ALEXANDRIA, Va. (4/6/09)— The National Credit Union Administration (NCUA) said Friday it plans to release information about the distressed securities held by U.S. Central FCU and Western Corporate FCU (WesCorp), including information on the Committee on Uniform Security Identification Procedures (CUSIP) numbers and par value. The announcement drew a positive response from the Credit Union National Association (CUNA), which has been pressing NCUA for greater transparency on its actions surrounding the corporates. Chief among its requests, CUNA specifically asked for the information on distressed assets and CUSIP numbers, especially after U.S. Central and WesCorp were placed into conservatorship last month. CUNA President/CEO Dan Mica commended the NCUA Board for moving to make this information available. “We’re pleased that the NCUA board is responding positively to our strong call for greater transparency," Mica said. "The release of information will shed new light on the assumptions, analysis and findings reflected in a PIMCO, which served as the basis for the agency’s estimate of the cost impact on credit unions.” The NCUA engaged Pacific Investment Management Company LLC—or PIMCO—for an independent analysis of potential losses at the two corporates. On Friday the agency said it will be releasing to members of U.S. Central and WesCorp information on the distressed securities each institution holds, including the CUSIP number and par value for each of the securities. The NCUA’s release of the securities information, Mica said, will, in effect, give the credit union movement the information it needs to do its own analysis comparable to PIMCO’s. The NCUA also said it plans soon to make public a summary of the analysis of the securities and various third-party estimates of credit losses. And it is directing U.S. Central and WesCorp to have their external vendors conduct quarterly reviews of all private-label mortgage-backed securities to determine revised estimates on credit losses that can be compared against NCUA’s own analysis. "This information will be very useful in determining the extent to which credit union capital deposits in corporate credit unions might be impaired," Mica noted. However, he added that CUNA will continue to vigorously pursue further clarity on how NCUA will view the accounting of the costs to natural person credit unions of the agency’s actions to stabilize the corporate system. “CUNA will also continue to work with NCUA toward passage of its legislative plan to mitigate those costs to credit unions by raising NCUA's borrowing authority from Treasury and allowing credit unions to spread out the costs over at least five but preferably seven or eight years,” Mica said. Use the resource link below to read the NCUA’s release on its second weekly update on corporates.
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