The second formula uses the Treasury's 4% capital-to-asset benchmark and the agency's assumptions on investments and loans it made in last year's stress test: MBS was valued at 100%, first and second mortgages and credit cards 92%, other consumer loans 90% (this is mostly vehicle loans), commercial real estate 100%, and commercial loans 95%.
Processing Content
Result: Institutions needing capital assistance-746 banks for $73 billion and 2,234 CUs for $11.5 billion.
"The main reason for the large number of credit unions in this scenario is vehicle loans, which are valued at 90%," Moebs said. "Credit unions got severely hit with repossessions last year."
