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NCUA update U.S. Central WesCorp coping with liquidity issues
ALEXANDRIA, Va. (11/3/09)--In its latest update on the status of the corporates, the National Credit Union Administration (NCUA) reported that “normal operations continue without interruption” at U.S. Central FCU (U.S. Central) and Western Corporate FCU (WesCorp) and both corporate credit unions, with the help of the agency, “have been effective in managing the seasonal liquidity pressures that occur during this time of the year.” Average share balances for the corporates have “remained relatively flat, removing some measure of liquidity pressures,” the NCUA added. The corporates also reported on their Other-Than-Temporary-Impairment (OTTI) charges for the recently-passed third quarter of 2009, with U.S. Central reporting a total of $320 million and WesCorp reporting a total of $356 million. These charges “have fully exhausted Paid-in-Capital (PIC) I and PIC II balances and depleted MCS to $140 million as of September 30, 2009” for U.S. Central and “have fully exhausted all PIC and MCS balances, and created a retained earnings deficit of $4.6 billion as of September 30, 2009” for WesCorp, the NCUA reported. Both U.S. Central and WesCorp have issued medium term notes to fund a total of $8.2 billion in outflows that will occur due to Credit Union System Investment Program (CUSIP) funds that will mature in January, February, and March of next year. CUSIP funds are issued under the Temporary Corporate Credit Union Loan Guarantee Program (TCCULGP). The NCUA in the release also confirmed that it will present its in-development proposed corporate credit union rule at its upcoming board meeting, scheduled for November 19th. “The proposed rule reflects a comprehensive review of the existing corporate regulations,” and “incorporated feedback obtained” from recently held online and live town hall meetings, the NCUA said.


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