NCUA Charters First Bridge Corporates To Liquidate U.S. Central, WesCorp
ALEXANDRIA, Va. – NCUA said this morning it has granted charters to two new bridge corporate credit union that will assume the operations of U.S. Central FCU and WesCorp FCU, the two biggest corporate failures.
The chartering of U.S. Central Bridge Corporate FCU and Western Bridge Corporate FCU will facilitate the agency’s “GoodBank/Bad Bank” plan to strip out the toxic assets of the two corporate failures for sale as securities and the continued operations of the ongoing payments and other services provided by the two entities.
Bridge corporate credit unions (“good banks”) are chartered by the NCUA Board to purchase and assume “good” assets and member share deposits from the conserved corporate credit unions (“bad banks”). Bridge corporate credit unions will be highly liquid and operated to ensure stability and minimize disruption of service to member credit unions.
“The creation of bridge corporates is an important interim step toward an orderly transition which will allow consumer credit unions to exercise real choice about the future of the corporate system,” stated NCUA Chairman Debbie Matz.
Similar plans are contemplated by the most recent corporate failures, Members United Corporate FCU and Southwest Corporate FCU.
NCUA will operate bridge corporates in a way that minimizes disruption of services provided to members. However, the bridge corporate cannot operate indefinitely. Bridge leadership will consult with members to develop a viable long-term plan that would enable the delivery of services transferring the bridge corporate's operations to a newly chartered corporate credit union, or selling operations to another entity capable of providing uninterrupted services.