JEFFERSON CITY, Mo.-NCUA will reveal its proposal for dealing with corporate credit unions' "legacy assets" by June 30, according to Chairman Debbie Matz.
Matz, in remarks before the Missouri Credit Union Association's 2010 Advocacy and Business Meeting last week, said the agency is "close to proposing a plan that would remove the riskiest legacy assets from ongoing corporates, while carrying forward the most valuable pieces of the corporate system. The plan would empower retail credit unions to choose which corporates they will support. And it would ensure that those corporates begin with clean balance sheets."
Matz added that if the proposal unfolds as planned, "It could even allow retail credit unions to recover future earnings from legacy assets that out-perform current loss projections."
Matz cautioned, however, the plan remains a "work in progress," acknowledging, "There is no easy way to un-bundle over $50 billion worth of long-term assets, repackage them into marketable bonds, and move them from corporates' balance sheets without realizing the losses.
NCUA has received more than 800 comment letters on the agency's proposed rule on corporate CUs. In a statement released following Matz's remarks, CUNA CEO Dan Mica said the trade group has "stressed how crucial it is for the agency to solve the legacy assets," and called the timetable proposed by Matz "commendable."
