Co-Ops for Change: U.S. Central Losses Far Less Than Projected

WASHINGTON – A new analysis by Co-Ops for Change asserts that U.S. Central FCU’s losses are likely to be far less than projected.

According to a statement released by Co-Ops for Change (www.coops4change.org), the June 30, 2013, update of U.S. Central’s securities shows that of the total $3.5 billion other-than-temporary-impairment (OTTI) future loss estimates, more than $2.3 billion is still unused. The $3.5 billion is from the June 2010 balance sheet, which also showed positive capital of $310 million, after these losses were expensed.

The release explains that the investments taken for NCUA Guaranteed Notes (NGN) collateral in October 2010 was $19.4 billion, and as of the June 2013 updates, this principal had been reduced by $7.5 billion. “Of this amount, $6.3 billion is from principal pay-downs and $1.2 billion from incurred losses, which are covered by the OTTI reserves,” the release details.

Co-Ops for Change alleges NCUA “assumed the worst” and loss estimates were projected during the depths of the financial crisis, and that the OTTI losses have yet to be realized.

“The findings in this analysis should magnify the importance and critical need of having NCUA leadership that places cooperative principals and capabilities at the foundation of its decisions,” said Chip Filson, chairman of Callahan and Associates. “This is an opportunity for all to learn from the past and strengthen our industry as we plan for our future.”

Co-Ops for Change is a website created by Filson, with a stated goal of re-orienting credit unions, including NCUA and the political process of board appointments, back toward the Seven Cooperative Principles.