NCUA Extends Corporate CU Bailout
ALEXANDRIA, Va. – NCUA yesterday extended its extraordinary guarantee of all corporate credit union deposits for another three months, allowing corporates to issue new CDs with maturities up to two years.
The guarantee, a critical component of NCUA’s corporate bailout, was extended to Dec. 31, 2012, just two months after it was extended through Sept. 30, 2012.
The deposit guarantee, which exceeds the $250,000 per account guarantee for all natural person credit unions, has been crucial in stemming a run on corporate deposits.
In May, NCUA extended the expiration of its guarantee program for all corporate debt, known as the Temporary Corporate CU Liquidity Guarantee Program.
The two guarantee programs are backed by the Temporary Corporate CU Stabilization Fund, which was created by Congress last year to fund the corporate bailout.
The programs have allowed NCUA to keep a handful of large corporates that are insolvent, including U.S. Central FCU and WesCorp FCU, afloat until a long-term resolution of the corporate system emerges. NCUA will to go a long way toward a resolution Sept. 16 when it is expected to approve a new corporate regulation and a plan on selling as much as $50 billion of toxic assets held by the corporates.