ALEXANDRIA, Va.-Audited financials for NCUA's year-old Temporary Corporate CU Stabilization Fund shows the corporate bailout fund ended 2009 with liabilities of just under $7 billion, or almost $1 billion more than projected when the fund was created last year.
The financials, audited by KPMG LLP, show liabilities include $6.365 billion for guarantees of debt and deposits held in the corporate network and a $1 billion capital note provided for U.S. Central FCU that was written off in recent months. As of Dec. 31, NCUA projected the fund will cover $6.4 billion in losses by the corporates, but that projection is almost certainly far too low at this point.
Those liabilities were offset slightly by $337 million in premiums collected by NCUA last year for the corporate bailout and $34.5 million in fees collected from corporates for the guarantee program. NCUA collected almost $1.1 billion in premiums for the fund last month.
The audit discusses two programs NCUA used the bailout fund to finance, including the CU System Investment Program, which provided $8.2 billion in low-cost loans to the corporates (mostly U.S. Central and WesCorp FCU), and the CU Homeowners Affordability Relief Program, which provided $95.6 million in low-cost funds to credit union for mortgage refinancing.
The auditor issued an unqualified opinion, even though it did not review the fund's compliance with laws and regulations.
The corporate bailout fund's financial report is presented under Federal Accounting Standards Board standards, which were adopted with the inception of the fund. FASAB standards are the preferred method of reporting for federal entities preparing GAAP-based financial reports for the first time.
